Dual-channel or BOPS? Return strategies in omnichannel with the presence of consumers’ anticipated regret

Abstract

This study examines when an omnichannel retailer should adopt buy online and pick-up in store (BOPS) as a return channel and how consumers’ anticipated online and offline regret affect pricing, channel demand, profit, consumer surplus and social welfare. A game-theoretic model is developed for identical products sold through online and offline channels under a full-refund policy. The analysis compares dual-channel and BOPS return strategies, with and without anticipated regret and uses analytical equilibrium results and numerical validation across product matching rate, return handling cost, BOPS convenience and cross-selling profit. BOPS return is more attractive for high-matching-rate products, low BOPS return handling costs, high BOPS convenience and stronger cross-selling profit. Under dual-channel returns, high online return costs or high matching rates make anticipated regret contract the market. Under BOPS, regret improves performance only when BOPS has meaningful cost advantages; when channel cost heterogeneity is small, regret reduces retailer profit, consumer surplus and social welfare. This study treats BOPS as a return-channel design and links anticipated regret, product matching and channel cost heterogeneity to omnichannel return strategy and welfare outcomes.