Returnless Partial Refunds: A Large-Scale Field Experiment in E-Commerce

Product returns create substantial financial burdens for e-commerce firms and hassle for customers. We study a returnless partial refund policy, which lets customers keep products while receiving claim-dependent partial refunds. In collaboration with a leading global cross-border e-commerce platform, we conducted a randomized field experiment involving 853,521 customers assigned to either returnless partial refund offers or the traditional return process. The platform implemented the policy through a multiagent artificial intelligence system that evaluated multimodal evidence and generated real-time offers at scale. Overall, the policy generated net transaction value gains of $1.44 per customer over 30 days and $4.41 over 90 days, driven by reduced return processing costs and increased subsequent customer spending, despite increasing refund payouts. With the experimental sample, the policy reduced return shipments, yielding estimated carbon savings equivalent to the sequestration of roughly 2,000 mature trees. These benefits were accompanied by more subsequent return requests with patterns consistent with lower-quality, opportunistic claims, revealing a tradeoff between service recovery and strategic behavior. Leveraging variation in refund generosity across two phases, we calibrate a revenue-maximizing average refund ratio of approximately 41% that balances customer value, operating costs, and opportunism.

History: Catherine Tucker served as the senior editor.

Funding: L. Fang acknowledges financial support from the National Natural Science Foundation of China [Grant 72501258], Major Special Project in Philosophy and Social Sciences of the Ministry of Education of China [Grant 2026JZDZ020], Major Program of the National Natural Science Foundation of China [Grant 72192803], and Major Project of the National Social Science Fund of China [Grant 22&ZD081]. Z. Yuan acknowledges financial support from the National Natural Science Foundation of China [Grants 72673168, 72141305, and 72192803], the National Key Research and Development Project [Grant 2024YFB3312900], Major Project of the National Social Science Fund of China [Grants 26ZDA030 and 25&ZD149], and the Fundamental Research Funds for the Central Universities.

Supplemental Material: The online appendices and data files are available at https://doi.org/10.1287/mksc.2025.0618.