In the age of mass production, the demand for customization is increasing. Customers prefer products catered to their individual needs and preferences over standard items—albeit at a cost.

Fortunately, recent advances in information technology, logistics, and advanced manufacturing processes such as robotics and 3D printing have enabled firms to customize products at scale.

In the highly competitive sportswear landscape, for instance, Nike and Adidas offer customizable shoes, while Puma sells only standard shoes. But even though the two sportswear giants seem to see the value of offering customized goods, their approaches to returns policy differ. At the time of this writing, Adidas only allows returns of standard products; Nike accepts returns of both standard and customized products.

In practice, returns of customized products is a tricky problem for businesses. While standard products can be resold, that’s usually not the case for customized items. After all, what is stylish to one may be outlandish to another. Moreover, who would buy a pair of sneakers embroidered with another person’s name? In such cases, should firms allow returns of customized goods? And under what conditions?

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