What is my return rate, and what do returns cost me?
Last updated
One month, counting orders rather than items.
Display only. Your figures are read in the currency you pick — nothing is converted and no exchange rate is applied.
Each order once, however many parcels.
In whole or in part.
Money handed back on a typical return.
Optional. The money spent on returns that never comes back.
Return label plus receiving and restocking.
Share of returns.
What those goods cost you.
Enter how many orders you shipped in a month, how many of them came back, and the average refund. Add what a return costs to ship back and handle to see the money that is spent rather than handed back.
- Orders shippedNeeded
- Orders returnedNeeded
- Average refundNeeded
- Return postage and handlingOptional
No benchmark return rate is used: every figure is one month of your own. To write or update the policy shoppers read, use the refund policy generator.
Nothing you type is sent anywhere. There is no account, no install and no store connection.
Orders, returns, refunds and the costs you never get back
Return rate is the share of orders that customers send back, and the cost of returns is everything those returns take with them, so an imaginary dress label that shipped 1,200 orders in a month and had 264 come back has a return rate of 22 percent, handed back 20,592 dollars in refunds, and spent a further 3,141.60 dollars on return postage, handling and stock it could not resell.
No benchmark return rate is used; categories differ too much for one to mean anything. To write the policy shoppers see, use the refund policy generator, and to see what an order leaves after costs, use the contribution margin calculator.
One month of figures from your order and returns reports. Count orders rather than items, and keep refunds apart from the money spent on handling, because only one of them is revenue handed back.
- Orders shipped
- Orders sent out in the month. Count each order once, however many parcels it went in.
- Orders returned
- Of those orders, how many came back in whole or in part. Counting orders rather than items keeps the rate comparable month to month, and it can never exceed the orders shipped.
- Average refund
- The money handed back on a typical return, including any shipping you refunded. Store credit and exchanges can be left out if you want to see only cash going back.
- Cost to ship back and handle
- Optional. The return label you pay for, plus the time or fee to receive, inspect and restock the parcel. This money is spent and gone, which is why the page reports it separately from refunds.
- Share that cannot be resold
- Optional, with the cost of goods in a typical return. Worn, damaged or opened items that have to be written off, discounted heavily or thrown away.
- Return rate and cost per order
- The share of orders that came back, and the money lost to returns expressed for every order you shipped, returned or not, which is the hidden charge each sale carries.
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Return rates and their cost at five imaginary shops
Invented stores, one month each, in US dollars. Their rates depend on what they sell and are not a guide to what yours should be. The table comes from the code behind the calculator above.
| Scenario | Orders | Returned | Return rate | Refunds | Spent on returns | Per order shipped |
|---|---|---|---|---|---|---|
| Dress label, sizes run small | 1,200 | 264 | 22.0% | $20,592.00 | $3,141.60 | $2.62 |
| Kitchenware shop | 640 | 19 | 3.0% | $798.00 | $228.00 | $0.36 |
| Sneaker reseller, free returns | 380 | 57 | 15.0% | $8,265.00 | $1,054.50 | $2.78 |
| Vitamin brand, refund only | 2,100 | 31 | 1.5% | $1,116.00 | — | — |
| Print shop, a quiet month | 150 | 0 | 0.0% | $0.00 | — | — |
Where a monthly return rate can mislead
Returns arrive late
An order shipped at the end of a month may come back in the next one. Measure a month that is at least a full return window in the past, or the rate will read low.
One rate hides the products that drive it
A store-wide rate can sit on a handful of items with sizing or quality problems. Run the numbers for your most-returned products separately to find them.
Exchanges are not the same as refunds
An exchange keeps the sale but still costs postage and handling twice. If you offer exchanges, count their handling cost even when no money is refunded.
Free returns shift the cost, not remove it
When return shipping is free to the shopper, the store pays it. Make sure the label cost is in the handling figure, or the cost of returns will look lower than it is.
A low rate is not always good news
A very strict policy can lower returns while also putting shoppers off buying at all. Read the rate beside your conversion rate and your reviews, not on its own.
Return rate questions
How do I calculate my return rate?
Enter the orders you shipped in a month and how many of them came back. The calculator returns the share of orders returned. The dress label above shipped 1,200 orders and had 264 returned, a return rate of 22 percent, or roughly one order in every four and a half.
Should I count returned orders or returned items?
Orders, for this page. It keeps the rate between zero and a hundred percent and stops a single multi-item return from skewing the month. Item-level return rates are useful for finding problem products, which is a separate exercise.
What does a return actually cost me?
Three things: the refund you hand back, the postage and handling to get the item back on the shelf, and the value of anything that cannot be sold again. The calculator keeps the refund apart from the other two, because those are money spent rather than money returned.
What is the cost of returns per order?
The hidden charge that returns put on every order you ship, not just on the returned ones, from handling and write-offs. It is the figure to hold against your margin on each sale.
How can I lower my return rate?
Find out why items come back: sizing, colour, quality or expectations set by the product page. Better size guides, clearer photos and honest descriptions usually help more than a stricter policy. Asking shoppers directly is the quickest way to learn the reason.
Is there a normal return rate for online stores?
Not one this page can stand behind. Rates differ enormously between clothing, electronics, beauty and home goods, and between stores in the same category. Track your own rate over time instead.
The cheapest return is the one a clearer answer prevented.
Nudgesmart has 13 campaign types, including a short on-site survey, so you can ask shoppers what they are unsure about before they buy.
