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Sending the shoes back? How about this lovely gift card? Cross-selling can help retailers avoid lost revenue from returns

Once we’ve chosen to buy something, we tend to consider that money as already spent or gone, also called “loss booking.” If we decide we want to return the item, retailers can take advantage of that tendency by giving customers enticing options to spend their refund on something else, instead of getting their money back.

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It’s become so darn easy to order stuff thanks to the miracles of online shopping. But it’s not so simple on the retailer end, especially when more than 16 per cent of those sales are later sent back. In the U.S., that adds up to a staggering $816 billion in lost revenue.

Cross-selling can help, say a pair of researchers. Their experiments show that once we’ve chosen to buy something, we tend to consider that money as already spent or gone, also called “loss booking.” If we decide we want to return the item, retailers can take advantage of that tendency by giving customers enticing options to spend their refund on something else, instead of getting their money back.

In a nutshell, “it hurts less to spend money refunded from a product return than other money, because you feel like you’ve already lost it,” says researcher Chang-Yuan Lee, an assistant professor of marketing at the University of Toronto’s Rotman School of Management.

Prof. Lee and his colleague Carey K. Morewedge from Boston University showed this over and over again in a series of experiments.  Participants were more likely to buy an item when they were paying for it through refund money compared to funds they hadn’t already spent. This occurred even in cases of unexpected money – it was still easier to apply a refund to another item than to spend windfall funds on it, such as imagined lottery winnings or tax refunds. And study participants were willing to accept an item outside their original product category – a $100 gift card for a sports shoe company after the return of a $90 grocery item.

There’s a catch though. The shopper has to psychologically mark the initial spend as lost, something that does not happen when they expect to ask for a refund at the time of purchase. Study participants who bought two pairs of shoes in different sizes, expecting to return the poorer-fitting pair, were not so likely to turn around and immediately apply the refund to something else offered.

Retailers are already on to cross-selling’s value. The researchers cite the online exchanges-first platform Loop Returns which claims to have retained nearly 29 per cent of potentially lost sales revenue for online merchants by offering consumers alternative product options before initiating a refund.

While consumers could be discouraged from making returns by being charged extra fees, that leaves a bad taste in their mouth and previous research has shown they may take their business elsewhere.

“Our proposed cross-selling strategy offers a solution for retailers to minimize revenue loss without imposing significant costs on both the retailers and consumers,” says Prof. Lee.

The study appears in the July issue of the Journal of Consumer Psychology.

Strategies

Renting out your place? Human connection key to a successful holiday rental

Warmth, friendliness and a sense of belonging, or the “homely” side of the experience, strengthen guest loyalty, making them more likely to return to the same host. However, these feelings alone didn’t necessarily make guests more likely to recommend the property to others.

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Striking up a connection with the property host is the factor that drives repeat bookings on holiday accommodation platforms such as Airbnb.

This is according to a new study, carried out by universities in the UK and Iran and published in the February 2026 edition of International Journal of Hospitality Management, that suggested that quality and value of accommodation also play a part in guest satisfaction, but personal connection is key to people deciding to stay again.

The research analyzed hundreds of online guest reviews and conducted in-depth interviews to understand what shapes guests’ evaluations of their stays in what is known as “peer-to-peer accommodation”.

Conducted over six years, the study shows that guests assess their stays using emotional cues such as warmth, atmosphere, and aesthetics; and cognitive cues such as cleanliness, safety, and convenience.

The study found that warmth, friendliness and a sense of belonging, or the “homely” side of the experience, strengthen guest loyalty, making them more likely to return to the same host. However, these feelings alone didn’t necessarily make guests more likely to recommend the property to others.

In contrast, affective and intellectual experiences – the enjoyment and perceived value of the stay – were stronger predictors of recommendations and positive reviews.

The research also examined how the quality of booking websites, such as Airbnb’s platform, influences guest behaviour. Although the website didn’t change how guests felt about the property itself, a well-designed and trustworthy site directly boosted guest loyalty and word-of-mouth.

Co-author Nektarios Tzempelikos, Professor of Marketing at Anglia Ruskin University (ARU), said: “Guests think carefully about both emotional and practical aspects before booking. Hosts who focus only on one side – either charm or functionality – may be missing the bigger picture.

“Platforms like Airbnb thrive when they’re designed for trust. Guests return to sites that are clear, reliable and easy to use. But it’s not just about tech, it’s about people. The most memorable stays come from warmth, authenticity and genuine local connection.

“By encouraging friendly, personal communication between hosts and guests, and balancing smart technology with a human touch, platforms can create experiences that feel less transactional and more meaningful.”

The study was carried out by researchers from Brunel University, University of Bradford, Newcastle University, Anglia Ruskin University and the University of Tehran.

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BizNews

Wine sellers, pay attention: Women more likely to choose wine from female winemakers

Messages like “proudly made by a woman winemaker” increased women’s intentions of purchasing wines, particularly when the label’s artwork reinforced the point with feminine gender cues such as flowers. Women were also willing to pay higher prices for those wines.

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Promoting women’s ownership in wineries can boost sales among the largest group of wine consumers, who happen to be women.

Messages like “proudly made by a woman winemaker” increased women’s intentions of purchasing wines, particularly when the label’s artwork reinforced the point with feminine gender cues such as flowers. Women were also willing to pay higher prices for those wines, according to the research from Washington State University and Auburn University.

The findings are noteworthy because 59% of all wine purchases in the US are made by women, said Christina Chi, coauthor of the research and professor of hospitality business management at WSU’s Carson College of Business.

Wine is often considered a cultural product, where the winemaker’s identity plays a role in shaping the brand’s image, she said.

Women winemakers, however, are less likely than their male counterparts to include their names on bottle labels or draw attention to their gender. Their reluctance may stem from concerns about prejudice toward their products in the male-dominated wine industry, Chi said.

“Our findings suggest that women winemakers and winery owners can benefit by being more visible,” she said. “The research shows that they can disclose their ownership with confidence and leverage it as a marketing strategy.”

The possibilities include putting “women-made wine” statements on labels or packaging, and retail store displays featuring women-made wines.

Demi Deng, an assistant professor at Auburn who earned her doctorate at WSU, is the first author on the research published in International Journal of Hospitality Management. Ruiying Cai, an assistant professor of hospitality business management at WSU, also contributed.

The new findings build on earlier studies showing that women are more inclined to buy wine with feminine gender cues on the labels. The 2024 research – by Cai, Chi, Deng, and WSU Emeritus Professor Robert Harrington – received widespread publicity. Beverage trade journals carried the story, and women winemakers were enthusiastic about the findings.

“As researchers, we want our work not only to have societal impact, but to have practical significance for the wine industry,” Chi said. “From the response, we saw that women winemakers were following our research and were eager for additional studies about women wine consumers.”

More than 1,000 US women participated in the most recent research, which involved a three-part study.

First, the researchers replicated the 2024 findings about feminine cues on wine labels. Using a fictitious Columbia Valley red table wine, the women surveyed expressed higher intentions of purchasing the wine when the label’s artwork featured a bouquet of flowers versus a masculine portrait. They were also willing to pay $3.50 more per bottle – about $17.75 for wines with feminine labels compared to $14.25 for wines with masculine cues.

In the second phase of the study, a “woman-made wine” statement was added to marketing materials. Women consumers had even stronger purchase intentions for wines with both the statement and feminine artwork on labels, the research found.

In the final phase, photos of women winemakers were further added to the marketing materials. But women were less likely to buy feminine-label wines when the female winemakers were pictured. Rather than focusing on the “woman-made” messaging, consumers’ decisions may have been swayed by whether they related to the individual women portrayed in the photographs, researchers said.

The studies also tested the marketing strategies on wines with masculine labels. Adding a “woman-made” statement significantly increased their appeal to women consumers. And when female winemakers were pictured in the marketing materials, women were willing to pay $3 more per bottle for wines with masculine labels.  

Besides helping women winemakers market their products, Deng said she hopes the research will draw attention to women’s contributions to the industry. In the United States, about 18% of winemakers are women.  

Deng worked as a sommelier in New Zealand before she earned her doctorate. “I actually encountered a lot of women winemakers, but their names aren’t visible in the wine market,” she said.

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Strategies

Digital targeting creeps out customers

When digital personalization crosses perceived boundaries, it triggers a powerful emotional response, which he calls “creepiness.” That response can backfire on digital marketers by materially reducing consumers’ willingness to buy.

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Years into the grand experiment of personalized digital marketing, most of us have had the experience: You search for a product — or just casually mention it. Suddenly, ads for that exact item stalk you across apps, websites, and social media. The targeting may be technically impressive, but it can feel unsettling.

That uneasy sentiment is the center of new research by Wayne Hoyer, professor of marketing and James L. Bayless/W.S. Farish Fund Chair for Free Enterprise at the McCombs School of Business at The University of Texas at Austin. He finds that when digital personalization crosses perceived boundaries, it triggers a powerful emotional response, which he calls “creepiness.” That response can backfire on digital marketers by materially reducing consumers’ willingness to buy.

The study, conducted by Hoyer and three marketing researchers from the University of Bern in Switzerland — Alisa Petrova, Lucia Malär, and Harley Krohmer — argues that creepiness is not a property of digital marketing itself. Instead, it is a structured emotional episode that unfolds inside the consumer in response to marketing.

The response has two parts: feeling ambiguous about what’s behind a marketing message, then deciding it’s a threatening form of surveillance.

“When consumers are exposed to these ads, they make an assessment of ambiguity, such as, ‘What is this?’ and whether this is intrusive surveillance, such as, ‘Are they watching me?’” Hoyer explains.

“If the answer is yes, this creates a negative emotion that can negatively affect purchase intentions.”

Particular about Privacy

In three studies involving 1,800 participants, the researchers exposed some people to targeted ads for headphones and sneakers — for example, seeing unsolicited ads shortly after talking about the product. Those subjects rated how uncomfortable they felt and why.

The studies compared their reactions with those of control groups that weren’t digitally targeted. The results confirmed that creepiness is real and alienates potential customers.

  • Perceptions of ambiguity and surveillance explained 75% of the emotional discomfort consumers reported.
  • Personalized ads nearly doubled levels of feeling surveilled compared with nonpersonalized ads.
  • On a 7-point scale for intent to purchase, each 1-point increase in consumer reactance reduced willingness to buy by about half a point.

Certain audience segments were especially vulnerable to feelings of creepiness. People who were more skeptical of advertising or more fearful of technological overreach were significantly more likely to interpret personalization as ambiguous and intrusive.

“Consumers do not like to be watched,” Hoyer says. “This is perceived as an invasion of privacy.”

Countering Creepiness: Try Kittens

What can brands do to mitigate feelings of creepiness?

In a final experiment, the researchers tested a variety of remedies, such as transparency about data use, assurances of good intentions, offers of discounts, and charitable donations. They also tried including positive emotional images in ads: pictures of kittens.

Perhaps unsurprisingly, the kittens proved somewhat effective at de-creeping consumer reactions and softening damage to their plans to buy. Offering monetary compensation also helped.

Overall, however, even the best interventions made only limited improvements to purchase intentions. Hoyer says, “Creepiness is robust and difficult to mitigate once triggered.”

This means that prevention is key, he says. It’s more effective to avoid creating bad feelings in the first place than try to repair them after the fact.

“Managers should focus on prevention by designing personalization practices that minimize ambiguity and try to avoid signals of intrusive surveillance,” Hoyer says.

The study suggests developing a Creepiness Level Index as a tool to help marketers track negative reactions to digital ads.

Over the long run, though, the marketing risk might diminish, he adds. “It is possible that creepiness will decline as consumers become more used to personalization and more accepting of AI technology.”

The Phenomenon of Creepiness in a Digital Marketing World” is published in Psychology & Marketing.

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