The economics of the money-back guarantee
- Written by Yalcin Akcay, Professor of Operations Management, Melbourne Business School

“Returning the product to Amazon ASAP!” complained one disgruntled Amazon customer as they gave a one-star review for a digital camera on the company’s site. This is despite the same product having an average rating of four-and-a-half stars out of five from 242 other customers.
Companies like Amazon aren’t just ignoring...