Attitude toward the Customer: A Study of Product Returns Episodes

Past research in the retailing and services marketing literatures has focused on the importance of creating and maintaining customer satisfaction (Anderson and Mittal, 2000; Berry and Bendapudi, 2003; Fournier and Mick, 1999; Oliver et al., 1997). One particularly important aspect of the customer satisfaction process that has received significant attention recently is service recovery, which is defined as the process by which the firm attempts to rectify a service- or product-related failure (Maxham and Netemeyer, 2002). Retailer responses to failures are shown to reinforce customer relationships when handled properly (Blodgett et al., 1997), and/ or aggravate the negative effects of the failure when mismanaged (Hoffman et al., 1995; Krapfel, 1988). The behaviors and feelings of the retail salesperson are of critical importance during the service recovery process. The retail salesperson frequently represents the final (or only) point of contact between the retail firm and the customer, and the service recovery efforts he/she enacts can have an enormous impact not only on immediate customer satisfaction, but, importantly, on service quality perceptions and future patronage intentions (Pugh, 2001; Bitner et al., 1994, 1990). One type of service recovery that has emerged as particularly salient to retailers is the handling of product returns. Returns transactions provide a critical point of contact between the retail firm and the customer, and return volumes can represent anywhere from 6-40% of sales for a given retailer. Return transactions also represent a prime opportunity for the retailer to recuperate assets and customers that might otherwise be lost (Stock, 1999; Rogers and Tibben-Lembke, 1999; Dunne et al., 2001). In general, most research addressing product returns has assumed that the customer has a legitimate reason for returning a product, and/or the retailer should accept returns with little or no questions asked. However, anecdotal accounts and articles in the business press refute this perceived legitimacy perspective (Krapfel, 1988; Steinauer, 1997; Tomlinson, 2002; Industrial Relations Review & Report, 1994). Retail salespeople who handle returns will readily share stories about outrageous customer behavior. For example, some customers return clothing items that are stretched or ripped at the seams, claiming poor workmanship, when in fact it is clear that the article was simply too small (Dacy, 1994). Other retailers and salespeople cite "boomerang shopping" (c.f., Neuborne, 1996) or "renting" as a major issue; that is, the customer purchases items that are intended from the outset to be used and then returned at a later date. One customer practicing boomerang shopping openly described Wal-Mart as being the "best rent-a-center in the country," as he recalled his purchase of a snow-blower during the autumn months and its subsequent return in the spring after the snow thawed (Neuborne, 1996). These and other types of questionable customer behaviors related to returns, such as receipt fraud, price arbitrage, and the return of stolen merchandise (Speights and Hilinski, 2005), are estimated to cost the retail industry over $13 billion per year (Rogers et al., 2005), placing returns abuse in a similar category with shoplifting and returned checks in terms of lost value to retailers. Unfortunately, the retail salesperson is frequently "caught in the middle," between satisfying customer desires and enforcing store policy. The salesperson may feel pressured to ignore customer malfeasance and provide "service with a smile," even in the face of overt or blatant attempts by the customer to take advantage of policies that are originally enacted with his/her best interests in mind (Tomlinson, 2002). The salesperson may suspect that the customer is blatantly misleading or even providing false information. It stands to reason that illegitimate or devious acts by the customer meant to circumvent store policies could eventually result in a negative emotional reaction by the retail salesperson. …