% of orders returned & cost impact. The Return Rate Calculator takes orders in the period, orders returned, average order value, handling cost per return (shipping, inspection, restocking) and returns return rate plus revenue refunded, handling cost of returns, total cost of returns. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Online and retail margins are decided by the costs that are easy to forget: fees, shipping, returns, storage and advertising. Fill in every line, even with an estimate, before deciding what to sell and at what price. Use the worked example below to check the maths against your own figures.
How the Return Rate Calculator works
Fashion runs 20–30% return rates, electronics under 10%. Track the rate by product to find sizing or description problems.
Worked example
With the example values (orders in the period of 2000, orders returned of 120, average order value of $60, handling cost per return (shipping, inspection, restocking) of $8), the return rate is 6%; revenue refunded $7,200.00, handling cost of returns $960.00, total cost of returns $8,160.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is return rate calculated?
return rate = returns ÷ orders; cost = refunds + handling.
Which figures do I need?
Orders in the period, orders returned, average order value, handling cost per return (shipping, inspection, restocking). Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Which fees should I include?
Every fee your platform or provider charges on a sale: commissions, payment processing, fulfilment, storage, advertising and the expected cost of returns. Fee schedules change, so check the current rate card.
