Retail pricing, cashback and refund decisions in a supply chain with e-shop and direct channels

Abstract

In this research, we are trying to design a model using incentive policies in a supply chain in which a store can sell either directly or through cash-back websites. The cash-back website returns a percentage of the paid price to the customer by sending a special link, created by this website based on the incentive policy. Although the extent of the impact of these websites on the sale rate, empirically or theoretically, is still uncertain, we know that this policy can have a positive impact on the online shopping and there are many customers who are sensitive to the price. The store’s website, in addition to the incentive policies, considers refund. Empirically, the refund policy provides a psychological comfort for customers. The use of incentive policies usually attracts more customers, but on the other hand, it reduces profits. The main purpose of this study is to examine the impact of the use of incentive policies and how these policies apply to the e-shop and other players in supply chain. Another goal of this study is to examine the behavior of the e-shop to create a cash-back website. This study examines the centralized and decentralized states.