The Implications of Retail Trade-ins on Sales, Returns, and Profitability: An Empirical Analysis of a Jewelry Trade-in Program
利用一家全国性珠宝零售商的数据，研究了以旧换新项目对符合和不符合条件产品的销售和退货率的影响，发现该项目使符合条件产品的销售增加11.4%、退货率上升4.3个百分点，而不符合条件产品的销售仅增加2.7%且退货率无变化，并指出选择性以旧换新项目可将盈利能力提升19%。
Most retailers offer trade-in programs that allow customers not only to trade-in a used product in part payment for the purchase of a new one, but also to return the new product purchased via a trade-in. In this context, we study how a jewelry trade-in program affects sales and returns of trade-in eligible versus ineligible new products, and how such programs can be better designed to improve profitability. We conduct an empirical analysis using data from a national jewelry retailer that increased the number of stores offering the trade-in program. Leveraging this expansion, we show that the trade-in program impacts sales and return rates, and find that this impact substantially differs across trade-in eligible versus ineligible products. For trade-in eligible products, sales increase by 11.4%, and so do return rates—by 4.3 percentage points. For trade-in ineligible products, sales increase by 2.7% and there is no impact on return rates. The provision of a trade-in option reveals a novel trade-off for retailers: It leads to higher sales, but also results in greater returns, which can be detrimental to profitability. Retailers therefore need to carefully assess this trade-off to manage trade-in eligibility of different products. A counterfactual analysis suggests that a selective trade-in program accounting for this trade-off can enhance program profitability by 19%.