Return Rate Impact Calculator
Calculate the true margin impact of product returns.
Inputs
$
%
$
$
$
%
Results
Monthly Return Cost
$7,200.00
≈ 7 smartphones
Returned Orders218
Returned Revenue$12,000.00
Lost Margin on Returns$4,800.00
Effective Margin (After Returns)37.3%
True Net Margin32.8%
Annual Return Cost$86,400.00
How to Use This Calculator
- Enter Monthly Revenue and current Return Rate (%).
- Input Average Order Value, Return Shipping Cost, and Restocking Cost per return.
- Set Gross Margin (%) to calculate the revenue impact of returns.
- Review Monthly Return Cost and the effective margin after returns.
- Use this data to justify investment in better product photography, sizing guides, or quality control.
How the result changes with Monthly Revenue
| Monthly Revenue | Monthly Return Cost |
|---|---|
| $10,000,000.00 | $720,000.00 |
| $35,000,000.00 | $2,520,000.00 |
| $65,000,000.00 | $4,680,000.00 |
| $90,000,000.00 | $6,480,000.00 |
What each input means
- Monthly Revenue
- Total monthly gross revenue.
- Return Rate
- Percentage of orders returned.
- Average Order Value
- Average order value.
- Return Shipping Cost
- Average cost to ship a return.
- Restocking Cost
- Average labor/cost to restock a returned item.
- Gross Margin
- Gross profit margin before returns.
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersMonthly Revenue = 100000, Return Rate = 12, Average Order Value = 55, Return Shipping Cost = 8 = 6 input(s) provided
- Calculate Monthly Return CostMonthly Return Cost7200 = $7,200
- Calculate Returned OrdersReturned Orders218 = 218
- Calculate Returned RevenueReturned Revenue12000 = $12,000
Engine last updated . Checked against 1 independently-derived test — how we verify calculators.
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