Ajjan presents on return policies at INFORMS conference

Haya Ajjan, associate professor of management information systems, presented at the 2017 INFORMS conference in Houston.

Associate Professor of Management Information Systems Haya Ajjan presented her paper "Aligning Price Adjustment Protection with Return Policy" at the 2017 INFORMS conference held Oct. 22-25 in Houston. More than 5,000 operations and analytics scholars attended from around the world.

Ajjan presented her analysis of the effects of return-policy durations on retailers who offer periodic discounts and those who do not. In addition, she examined the effects of a price adjustment protection policy.

The paper was co-authored by Ajjan, Moutaz Khouja, professor of operations management at UNC-Charlotte, and Xin Liu, assistant professor of management at Elon.

The abstract reads as follows:

Product returns cost businesses billions of dollars annually.  Consumers return products if they are unsatisfied with them or may return and repurchase products in order to obtain a temporary price discount. In this paper, we analyze the effect of return policies durations on retailers who offer periodic discounts and those who do not. We also examine the effects of offering a price adjustment protection policy and its optimal duration. We compare policies in which non-cash refunds are given vs. those where cash is used. We find that using noncash refunds can significantly reduce the cost of providing a return policy and may even make such a policy profitable. We also find that for retailers who offer periodic price discounts to consumers, offering a price adjustment policy with the same duration as the return policy can be optimal and can considerably reduce the cost of the return policy. The latter assertion can hold even if the price adjustment protection does not lead to an increase in demand.

INFORMS is the leading international association for professionals in operations research and analytics, with more than 12,500 members from around the globe.

INFORMS promotes best practices and advances in operations research, management science, and analytics to improve operational processes, decision-making, and outcomes through an array of highly-cited publications, conferences, competitions, networking communities, and professional development services.