Abstract: We study an offline to online supply chain that consists of a manufacturer and an online retailer. The online retailer offers a money-back guarantee, which allows customers to return product that do not meet their expectations to the online retailer for a full refund. Three types of models are constructed in this paper, which are the Nash game model and two Stackelberg game models dominated by the manufacturer and respectively. By the solutions, we derive, for each supply chain participant, the optimal profit of system, and the equilibrium pricing, demands, profits under each power structures. On this basis, we investigate the impact of the showroom on the consumer purchasing behaviors and consumer surplus. The results show that, the showroom can increase the demands and decrease product return rates. Moreover, the introduction of showroom can effectively increase the manufacturer’s profit, while the showroom may not increase the profit of the online retailer. Moreover, the different power structures between the manufacturer and the retailer plays no role on the profits of the whole supply chain and consumer surplus.

Key words: O2O supply chain, showroom, power structure, money-back guarantees, consumer surplus