Returnable-after-deep-trial policies in e-commerce supply chains with opportunistic consumers

In response to consumer desire for a deep experience of product performance, some online sellers have strengthened their traditional money back guarantee by implementing the “returnable after a deep trial” (RADT) policy. But such a policy has also encouraged opportunistic behavior. Considering such opportunistic behavior for consumers, we build an e-commerce supply chain model to investigate the price decisions and the return strategy (implementing RADT or not) of online sellers under two selling modes: agency selling and reselling. We show that the RADT is often expensive for consumers. Besides, counterintuitively, when the online seller allows for an increased degree of deep trial, the seller is highly likely to decrease the retail price and the refund amount, simultaneously. Moreover, opportunistic consumers also have strategic value: although consumers’ opportunistic behavior under the RADT seemingly harms the online seller, in fact, the seller may generate profits by strategically encouraging opportunistic behavior. Furthermore, under agency selling, when consumers’ benefit from opportunistic behavior is not extremely small, and most ordinary consumers directly return the product, the RADT is optimal; while under reselling, the RADT is optimal if most ordinary consumers directly return the product. Surprisingly, more opportunistic consumers increase the online seller’s incentive to adopt the RADT policy.