Mitigating return behaviour through policy innovation: the mediating influence of augmented reality in online retailing

The rapid growth of e-commerce has led to a costly and operationally difficult rise in product returns. To counter this trend, retailers have had to strategically implement new return policies. This study investigates the impact of adopting new return policies and the role of augmented reality in preventing return behaviour. A quantitative, cross-sectional research design was employed using purposive sampling. Data were collected from 209 online shoppers through a structured questionnaire administered via Google Forms. Partial least squares structural equation modelling (PLS-SEM) was used to analyse the data. The model was assessed for internal consistency, construct validity, and predictive power using Cronbach’s alpha, validity measures, R 2 values, and path coefficient estimation. The results indicate that strict return policies have a significant negative effect on return behaviour, whereas shipping fees and abuse prevention measures do not show a direct impact. Augmented reality plays a strong mediating role by enhancing the effectiveness of all return policy factors in mitigating return behaviour. The study is limited by its use of purposive sampling and a cross-sectional design limit the study. Future research could extend the model by examining specific product categories, such as apparel and menswear, or by employing longitudinal and experimental research designs. E-commerce platforms and retailers can reduce return rates and improve operational efficiency by integrating AR-based product visualisation tools with clear return eligibility criteria and non-refundable policies. Such strategies can help create a more transparent, sustainable, and consumer-friendly online shopping environment.