The main purpose of this study is to increase the understanding of consumer behaviour with respect to (r)e‐tail borrowing, performed under different (more or less generous) delivery and return policies.
The study was designed as a randomised controlled experiment with a random sample strategy. Among the 192,482 Swedish customers who had made an order at nelly.com during the previous 12 months and were to receive the quarterly nelly.com newsletter in November 2010 by e‐mail, 4,000 were randomly selected and randomised into four groups of 1,000 in each group.
The experiment revealed certain purchase and return patterns that support the conclusion that (r)e‐tail borrowing behaviour exists in fashion e‐commerce. Evidence was also found that lenient delivery and returns policies seem to reinforce (r)e‐tail borrowing behaviour, albeit not always in expected ways.
Differences in delivery and return policies seem to impact consumer purchase and return behaviour differently depending on the type of item. Therefore a more differentiated view of how to apply them is suggested. Offering the same delivery and return policies to all types of customers and products is generally not optimal with respect to profitability.
The paper illustrates the need to consider both delivery and returns policies together with customer and product categories simultaneously when applying them in an e‐commerce context.
