New research gives retailers helpful recommendations
Ali Besharat
Have you ever bought a new dress, only to wear it with the tags on and return it? Have you purchased new hiking shoes, climbed a few 14ers and then decided you’d rather have a different pair of shoes?
Retailers call this practice “wardrobing,” and it costs companies an estimated $5 billion in annual revenue. But, new research from Daniels Associate Professor of Marketing Ali Besharat shows that there might be a way for retailers to decrease this behavior.
The new study, “I See Me: The Role of Observer Imagery in Reducing Consumer Transgressions,” was published in the Journal of Business Ethics. Besharat and his co-authors explain that the bulk of consumer returns are legitimate. But some “involve consumers engaging in morally and legally questionable actions that damage brand equity and directly affect companies’ bottom lines.”
The authors note that consumers might purchase a cocktail dress from Nordstrom for a reunion or a Sharp 60” HD LED smart television just before the Super Bowl and then return them for a full refund, or they may consider buying a counterfeit product for a fraction of the price of an original brand.
“These are big challenges in the retail industry,” Besharat said. “High-end brands like Nordstrom or REI that have traditionally honored customer returns have been penalized. Some customers are taking advantage of it.”
Besharat and his fellow researchers set out to see if they could influence the bad behavior, which they call transgressions—essentially the act of deliberately violating the established marketplace codes of conduct. They knew from studies in the psychology literature that using mental imagery, where people observe themselves from a distance, is shown to modify behavior.
“Consumers who come from what’s known as an actor perspective, are always thinking about things from their perspective,” Besharat said. “If they solely focus on the consequence of an action, the consumer could justify to themselves and others the return of a worn outfit if the action minimizes their financial loss. In contrast, consumers who adopt an observer imagery perspective are likely to keep a greater perceived distance to themselves while increasing their focus on the action itself and its inherent motives. The observer imagery should make consumers more likely to see their own transgression objectively for what it is: a morally questionable act.”
The researchers put 142 consumers through an experiment where they were either given an actor perspective or observer perspective scenario about buying an expensive designer T-shirt that they wanted, but couldn’t afford. The results showed that the observer perspective “increased moral stringency” and dissuaded consumers from purchasing a counterfeit product.
In a second experiment, 64 participants were also given an actor perspective or observer perspective scenario, this time about returning an outfit that had been worn to a wedding. Again, the observer imagery induces moral stringency and reduces the return tendency.
In the last study using 313 consumers, the authors found that the market transgressions decrease once people are made aware of the motivation behind, rather than consequence of, their return decisions.
“The focus should be on the consequence to the retailer. In fact, the reason actors (vs. observers) show more leniency in moral standards is because they see things from their own perspective,” Besharat said. “Thus, while their motivation is questionable, they don’t see any harm or loss to them (as a consequence) in returning a product.”
Besharat said the research can be used by retailers to influence unnecessary returns.
“I’d suggest that retailers show some simple videos to consumers before having them return a product,” he said. “Let people watch and see themselves in the observer role and it’ll trigger morale.”
Besharat also said retailers can show customers what happens to the product when it’s returned.
“Show them who gets burned in the process and see if people are more stringent with returns.”
Nowadays, returns are considered an acceptable norm. They may not cost consumers, financially or psychologically, anything so they are perceived as a penalty-free act. However, more work is needed to educate consumers about the purpose of product returns and highlight the negative impact of them on retailers, and the economy as a whole.
For interviews with Ali Besharat, please contact Kristal Griffith.