Should firms provide online return service for remanufactured products

Abstract As Information and Communication Technologies (ICT) grows rapidly, firms are increasingly selling remanufactured products online. To investigate optimal online return policy for remanufactured products, our paper considers a firm selling new and remanufactured products online in the carbon tax policy context, and two cases are investigated, i.e., not provide online return services for remanufactured products (NR) and provide online return services for remanufactured products (YR). By developing several basic theoretical models, we find that the firm should choose YR when unit salvage value of returned new product is relatively low; otherwise, the firm should choose NR. Furthermore, if consumers have a strong satisfaction for new product, YR is not beneficial to consumers. Interestingly, if emissions intensity of remanufactured products isn’t small, YR compared with NR couldn’t curb carbon emissions. At last, we also consider a supply chain with a manufacture and a retailer and supply chain coordination issues, and discover that a two-part tariff contract could coordinate the supply chain whereas return cost sharing contract is invalid.