The Influence of Buy-Now-Pay-Later on Product Return Rates in E-commerce

Sammanfattning: The continuous rise of e-commerce represents a channel shift away from physical retail stores. Additionally, it is also impacting purchase and return behavior. The return rates in e-commerce are higher than in traditional brick-and-mortar stores and are negatively impacting efforts to improve environmental performance. The shift in consumer preference is also fueled by the presence of innovative payment methods such as Buy-Now-Pay-Later (BNPL). This thesis investigates the impact of BNPL on product return rates (PRR) from three perspectives relying on a data set provided by a Scandinavian Retailer. First, the comparison with conventional payment methods such as Card Payment and Direct Bank Transfer shows significantly higher PRR for BNPL purchases. Secondly, the analysis of Swedish and German BNPL users shows significantly higher PRR for the latter consumer group. Thirdly, an analysis of the PRR of BNPL users based on age confirms different behaviors for different age groups. This quantitative analysis contributes to existing research on return management providing theoretical and practical implications.