Money-Back Guarantee, Dual Money-Back Guarantee, and O2O Strategy in a Manufacturer’s Dual-Channel Supply Chain

Table 1

Comparison among recent relevant studies.

	Channel structure	MBG	DMBG	Two pricing strategies	O2O	Major findings
Davis et al. [31]	M	√	×	×	×	MBG enhances profit (if net salvage value is positive)
Chen and Chen [3]	D	√	×	×	×	MBG mitigates price competition and may result in a Pareto improvement in both retailers’ profits
McWilliams [4]	D	√	×	×	×	MBG helps the low-quality retailer and harms the high-quality retailer (if the net salvage value is positive)
Chen and Chen [18]	R-D	√	×	×	×	MBG is the dominant choice for both channels (if the net salvage value is positive)
Xia et al. [44]	M-D	√	×	×	×	The retailer’s high service cost reduces the manufacturer’s incentive to add a direct channel in the presence of customer returns
Li et al. [45]	M-D	√	×	×	×	The manufacturer prefers to offer MBG in both channels if the return rate is low
Li et al. [1]	M-D	√	×	×	×	MBG (if the net salvage value is positive) is the dominant choice for retailer’s channel, and the manufacturer may offer an MBG even if the net salvage value is negative
Heydari et al. [7]	M	√	√	×	×	DMBG can achieve Pareto-improving supply chain coordination
Gallino and Moreno [42]	R-D	×	×	×	√	The O2O strategy of “BOPS” has a cross-selling effect and channel-shifting effect
Gao and Su [35]	R-D	×	×	×	√	The O2O strategy of “BOPS” enables retailers to reach new customers, and its revenue can be shared across channels to alleviate incentive conflicts
Gallino et al. [43]	R-D	×	×	×	√	The O2O strategy of “ship-to-store” can effectively improve the overall sales dispersion of retailers, where the lowest-selling products contribute the most
Present study	M-D	√	√	√	√	The handling loss with returns and the customer return cost for each channel are critical factors that a retailer or manufacturer should consider when choosing an MBG or a DMBG return strategy. Moreover, the retailer should cooperate with the manufacturer to establish an O2O omnichannel to make greater use of the convenience and advantages of the retail channel

Decision is considered (√) or not considered (×). Channel structure: manufacturer’s dual channel (M-D; manufacturer’s dual channel in which the manufacturer operates a direct channel and the retailer operates a retail channel); retailer’s dual channel (R-D; retailer’s dual channel in which the retailer operates both direct channel and retail channel or a retailer operates a direct channel while another retailer operates a retail channel); duopoly (D; single channel of duopoly); Monopoly (M; single channel of monopoly). Pricing: uniform pricing and nonuniform pricing strategies are considered (√) or not considered (×).