provides an opportunity to create consumer value (Kumar et al., 2010), returns are unique in
that they begin with a negative experience that precipitates the return. When a firm acts to
turn a negative experience into a positive one, consumers are often motivated to purchase
again from the same firm and spread the word to others about the turnaround experience
Product returnsrequire companies to perform a balancingact between setting policiesthat
are simple enough to encourage repeat shopping, yet strict enough to prevent return abuse,
while also maintaining an effective process to dispose of returned products (Goldman, 2016;
Jack et al., 2010). Traditional product return strategies have focused on optimizing return
policies to minimize returns as much as possible and/or identifying characteristics of “serial”
returners (Daunt and Harris, 2012; Davis et al., 1998; Janakiraman and Ordonez, 2012).
However, this optimization approach significantly downplays the importance of human
behavior in product returns and largely ignores insights generated from the processing of
returns. Returning a product involvesthe interaction of at least two people (e.g. the customer
and the employee accepting the return) but typically more, all of whom have different
motivations, power, and information-processing capabilities. Companies have traditionally
assumed customersbehave rationally when returning products(i.e. return a product because
it is defective).However, shopping trendsindicate customers areincreasingly prioritizingtheir
needs at the expense of the seller’s (e.g. buying multiple sizes of the same product with
the intention of returning the sizes that do not fit; Welson-Rossman, 2018). Furthermore, the
employees who evaluate and process returned products are not immune to decision-making
errors. Thus, in comparison to return behaviors by customers, behaviors of employees
processing product returns have received little attention in the literature, despite their
substantial impact on a firm’s profitability.
Embracing and leveraging employee behaviors during the returns process represents
one relatively untapped, alternative approach to the optimization of customer behaviors,
with the potential to reveal product quality issues and suggest solutions to those issues in
real time (Storer et al., 2014). This research applies complex adaptive systems (CAS) theory
(Holland, 1995) to explore the different parts of the system that interact during the
processing of product returns. More specifically, we will closely examine how employee
behaviors can benefit or harm the system. Unlike an optimization strategy that assumes
customer and employee behaviors do no harm, CAS theory studies both the benefits
(e.g. creativity) and drawbacks (e.g. conflict) of human behavior on the system (Nilsson and
Gammelgaard, 2012). One important research question that arises is:
RQ1. How can employee behaviors during the processing of product returns increase the
reverse supply chain’s adaptability?
The objective of this paperis to explore the product returns process from a CAS perspective.
Specifically, thisresearch examines how interactions, learning, and adaptationsoccur during
the processing of product returns. To achieve this purpose, we examine the product returns
process at five different case companies to develop an in-depth understanding of the roles
employee behaviors play. In the next section, we review the relevant literature, and offer a
brief description of our abductive case study methodology. Next, detailed descriptions of the
product return processes observed at each of the five case companies are provided, followed
by a discussion of CAS-grounded patterns that emerged across the cases. The paper closes
with a discussionof the implications of the current researchand directions for future research.
2. Literature review
The conceptualresearch framework (seeFigure 1) for this researchis based on the intersection
of the product returnsprocess and CAS theory, and is grounded in researchinsights from the
reverse logistics, supply chain management, natural and social sciences literatures.