This paper studies the online shopping situation where retailer faces uncertain demand and uncertain consumer valuations. We compare the suitability and effectiveness of two return freight policies, consumer affording return freight (C-Policy) and retailer paying return freight (R-Policy). Moreover, we explore the effect of non-defective returns, and the retailer’s optimal decisions on retail price and order quantity. Our results suggest that return freight policy is related to the actual quantity of returns and the proportion of non-defective returns. In general, R-Policy is reasonable when the actual returns is low, C-Policy is reasonable when the actual returns is high. But when the actual returns is not too low or too high, the return freight policy is closely related to the proportion of non-defective returns. Our study shows C-Policy is better if the proportion of non-defective returns is lower, otherwise R-Policy is better. In addition, we find the optimal retail price and the optimal order quantity decisions are also related to the actual returns and the proportion of non-defective returns. Usually, the higher the actual returns, the lower the optimal retail price and the more optimal order quantity. The higher the proportion of non-defective returns, the higher the optimal retail price and the less the optimal order quantity. At last, we find high returns are harmful to retailers, which erode the profitability of online retailers. However, an interesting observation is that the damage of high returns can be alleviated when most of returns are non-defective returns. That indicates the risk of high returns is not as terrible as we intuitively think.

中文翻译：

---

谁应该为在线零售中的退货运费付款？零售商或消费者

本文研究零售商面临不确定的需求和不确定的消费者估值的在线购物情况。我们比较了两种退货运费政策的适用性和有效性，消费者负担退货运费（C-Policy）和零售商支付退货运费（R-Policy）。此外，我们还探讨了无缺陷退货的影响，以及零售商对零售价格和订单数量的最佳决策。我们的结果表明，退货运费政策与退货的实际数量和无损退货的比例有关。通常，当实际收益较低时，R政策是合理的；当实际收益较高时，C政策是合理的。但是，当实际退货率不太低或太高时，退货运费政策与无缺陷退货的比例密切相关。我们的研究表明，如果无缺陷收益的比例较低，则C政策更好，否则R政策更好。此外，我们发现最优零售价和最优订货量决策也与实际收益和无缺陷收益的比例有关。通常，实际退货越高，最佳零售价格越低，订单数量越多。无瑕疵退货的比例越高，最优零售价越高，最优订货量越少。最后，我们发现高回报对零售商有害，从而侵蚀了在线零售商的盈利能力。但是，有趣的观察是，当大多数收益为无缺陷收益时，可以减轻高收益的损害。这表明高回报的风险并不像我们直觉的那样可怕。