Many direct-marketing agencies offer price refunds to unsatisfied customers, but some consumers order products with no intention of keeping them. Research shows that these returns can be controlled in a profitable way by imposing nonrefundable charges that increase with the value of the merchandise ordered, according to Eitan Gerstner, associate professor in the Graduate School of Management at UC Davis. He is one of three authors of a working paper, "Controlling Product Returns in Direct Marketing." Mail-order shopping is big in the United States -- nearly 12 billion catalogs were distributed by companies to consumers in 1993 -- and more than half of the country's population made at least one product purchase by phone or mail, according to data collected by the researchers. "Intuitively, the nonrefundable charges can be interpreted as a tax or rental fee for the right to examine products. The list prices are charges for the right to keep products. Customers who return merchandise are reimbursed only for giving up the second right, but not the first," says Gerstner.