Loyalty Programs in Second-Hand Markets Stimulate Demand but May Interfere With Supply
Loyalty Programs in Second-Hand Markets Stimulate Demand but May Interfere With Supply

Author(s): Ebo Botchway, Jan Verpooten, Jack McLaughlin, Siegfried Dewitte
Subject(s): Economic development, Business Ethics
Published by: Scientia Moralitas Research Institute
Keywords: circular economy; loyalty program; second-hand market; repurchase;
Summary/Abstract: This study investigates a specific attribute of the circular economy, the direct reuse of old products, and the use of the traditional marketing mechanism of loyalty programs of stimulating this attribute. We conducted two studies into common (clothing) and uncommon (electronics) second-hand markets, testing the effectiveness of rewarding purchases and donations in stimulating the (intended) demand and supply in second-hand stores. Our findings indicate the effectiveness of various loyalty programs in stimulating the intention to repurchase in second-hand stores. We also identify that a loyalty program, which rewards purchases and donations, can effectively stimulate the supply to second-hand stores, but only for customers with a low donation history. However, for those with a substantial donation history, loyalty programs that rewards donations reduce their donation intentions.

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