This paper proposes a retailer collection model whereby the retailer collects end‐of‐life products and the manufacturer cooperates with a third‐party firm to handle used products, and a non‐retailer collection model whereby a third‐party firm is subcontracted by the manufacturer for collection work. While the return rate, manufacturer’s profits, and channel members’ total profits of the retailer collection model are not always superior to those of the non‐retailer collection model, we find that the retail collection model analytically outperforms when the third‐party firm is a non‐profit organization for recycling and disposal.
