New research from the University of Notre Dame reveals that letting customers keep instead of returning products taps into powerful psychological principles that transform transactional relationships into personal ones – changing the brand’s perception.
The study, published in the Journal of Marketing Research, shows that “returnless returns” significantly boost customer loyalty, positive word-of-mouth, and repurchase intentions.
The practice is growing in popularity. A 2023 survey of major retailers showed that 59% were using this approach, more than doubling from the previous year.
The Reciprocity Principle In Action
The Notre Dame study found that returnless returns work because they make customers see the relationship with a company as more personal and friendly, rather than purely business-focused.
Letting a customer keep an item instead of returning it activates one of Robert Cialdini’s influence principles, reciprocity. When someone does us an unexpected favor, we feel like we are in their debt, however slightly.
One of the experiments gave students BIC pens as a reward for a small task. Some pens lacked an ink cartridge, making them useless. Students who received a new pen without having to return the defective one rated BIC significantly higher than those who received working pens from the start.
In other words, despite receiving a defective product they couldn’t use, the subjects liked the brand more because of how the company handled the situation.
Most business relationships feel transactional. You pay money; you get a product; and it’s the end of the story. But when a company tells you to keep something for free, it feels more like how a friend might treat you.
One of my early experiences with Amazon.com shocked me. I had bought a small item that didn’t work for my purpose. It wasn’t defective or improperly described, the mistake was mine. I wondered if the company would let me return it, but I needn’t have worried. Not only did it approve a refund, it told me to just keep the item instead of returning it.
This combination of trust and convenience influenced me to keep using Amazon as my go-to source for whatever I needed.
Trust Signals Drive Better Results
The most striking finding involves trust dynamics. Requiring customers to provide proof of defects (like photos) eliminated most of the positive effects. When companies demonstrate trust by not requiring proof, customers respond with dramatically increased loyalty and advocacy.
In one experiment, students were presented with a hypothetical return situation involving a shirt identical to one they had received as a gift. Subjects who got to keep the shirt wrote significantly more positive reviews about the brand compared to both other groups.
“Increased brand support generated through returnless returns can sometimes be greater than the support generated when a consumer appears to be happy with a product and does not initiate a return,” notes researcher Christopher Bechler.
Strategic Communication Amplifies Impact
How companies frame their returnless return policies dramatically affects customer response. The research identified critical communication strategies:
Case-by-Case Framing: “Drawing from our theory that offering returnless product returns boosts brand support because they increase brand warmth, we find that returnless policies implemented on a case-by-case basis are actually more effective for a couple of reasons,” John Costello said. “The consumer feels they are getting special treatment.”
Motivation Matters: When brands explained they were offering returnless returns to make customers’ lives better or to promote sustainability, customers showed much higher loyalty than when companies cited cost reduction as the motivation.
Donation Suggestions: When brands recommended donating unwanted items to charity, customers rated them as even warmer and more trustworthy compared to companies that made no suggestion or recommended throwing items away.
Implementation Guidelines For CMOs
The research provides clear direction for marketing leaders considering this approach:
- Emphasize Customer Benefits: The customer-centric message used in one study stated: “When managing returns, our primary goal as a company is to make our customers’ lives better.”
- Avoid Proof Requirements: Trust signals are crucial—asking for documentation undermines the psychological benefits.
- Consider Product Range: The study found these effects worked across a wide range of products and situations, from embarrassing items like anti-diarrheal medication to everyday products like sweaters and phone chargers.
Managing The Risk Of Abuse
While the benefits of letting customers keep unwanted products are compelling, CMOs must balance generosity with prudence. The obvious risk is that customers might abuse the policy by requesting “returns” on items they actually intend to keep.
Companies like Amazon implement selective returnless returns based on algorithms that consider customer history and product value. This balanced approach maximizes the relationship-building benefits while minimizing financial exposure.
My own experience with Amazon is that since it has implemented nearly frictionless Whole Foods return processing it rarely offers to let me keep items. The experience of customers with less convenient return options may be different. They still demonstrate trust by processing a refund instantly, even though they haven’t inspected the returned item for accuracy or condition.
The Competitive Advantage Of Trust
Companies that treat returns as relationship-building opportunities rather than cost centers are tapping into human psychology about trust, generosity and reciprocity. In an era of ever-higher customer acquisition costs, turning a potential negative like a return into a loyalty driver creates a significant competitive advantage.
The research shows that sometimes the most profitable return is the one that never happens: Letting the customer keep the product turns a transactional disappointment into a relationship-building opportunity.