Final answer:
When a customer returns a defective product, the seller records a refund or replacement transaction. Strategies to reassure customers include offering money-back guarantees and limited replacement rights.
Step-by-step explanation:
When a customer returns a defective product for credit that they had previously purchased, the seller would record the transaction by providing a refund or a replacement for the product.
In the case where a buyer has imperfect information about the product, there are several strategies that the seller might employ to reassure them. Money-back guarantees are a common strategy that serves as a promise of quality, especially important for companies selling through mail-order catalogs or over the web.
This reassures customers as they cannot see the actual product and may feel uncertain about keeping it. Additionally, offering a limited right of replacement or a full refund within a certain period can also help to alleviate customer concerns and build trust in the seller's commitment to quality.