What do returns really cost per order?
A return costs far more than the return label. The revenue is refunded, but shipping, fees, advertising and handling are lost. For a €39.99 product, 10 % returns reduce the contribution from €7.61 to €4.95 per order – €2.66 on every order you sell, not only on the returned ones.
Enter your own return rate and cost per return – the calculator shows contribution and margin as expected values.
Open the profit calculatorWhat you lose on a returned order
When a customer sends an order back, you refund the price and – if the product is undamaged – put it back into stock. Everything else is gone:
- Outbound shipping and packaging.
- Marketplace and payment fees (often only partly refunded).
- The advertising that brought the order.
- The return label, handling, checking and repacking.
- Write-offs for goods that cannot be sold as new.
Calculating with expected values
Because you do not know in advance which order will come back, calculate per order with the return rate: revenue and product cost are only earned on the orders that stay, all other costs occur on every order. That is exactly how the profit calculator works.
| Expected net revenue | net price × (1 − return rate) |
|---|---|
| Product cost | purchase price × (1 − return rate) |
| Return cost | cost per return × return rate |
| Contribution | expected net revenue − all costs |
Table: contribution by return rate
Same product: €39.99 incl. 19 % VAT, purchase price €12.00, shipping €4.50, 15 % marketplace fee, €3.00 ads, €5.00 per return.
| Return rate | Contribution per order | Margin |
|---|---|---|
| 0% | €7.61 | 22.6% |
| 5% | €6.28 | 19.7% |
| 10% | €4.95 | 16.4% |
| 20% | €2.29 | 8.5% |
| 30% | -€0.37 | -1.6% |
January: the returns from Christmas
After Christmas many gifts come back, so January traditionally brings a lot of returns (OnlinehändlerNews, see sources). The University of St. Gallen sees the share of returns falling since 2022 – so the January peak may be smaller than you remember. How big it is in your shop, only your own numbers can tell.
What it can cost, with example values (not measured): if the return rate of your December orders is 20% instead of your usual 10%, the contribution falls from €4.95 to €2.29 per order. On 100 December orders that is €266.05 less than you planned.
What to check in January:
- Your real return rate of the December orders – count the returns that arrive in January too.
- Which products came back most often and why (size, damage, unwanted gift). Fix the product page or packaging of the top ones first.
- Whether returned goods can be sold again as new. Enter write-offs in the cost per return.
- If you extended your return period for Christmas: returns can come weeks later. Plan your cash and stock with that in mind.
- Then enter the real rate in the calculator or rerun the shop check – your margin for the new year starts from that number.
Worked examples: 10 % returns on a €39.99 product
Costs as in the table above. How much of the contribution do the returns take?
- Contribution without returns
- €7.61
- Contribution with 10 % returns
- €4.95
- Cost of returns per order sold
- €2.66
- Share of the contribution lost
- 35%
- Margin with returns
- 16.4%
Every percentage point of returns costs about €0.27 per order here – reducing returns is often worth more than a small price increase.