Free calculator
Return Rate Cost Calculator for Shopify Stores
Enter your monthly orders, return rate and per-return costs. The calculator splits what returns cost you into logistics, inventory you can't resell at full price, and the refunded revenue itself.
Returns cost per month
$902
48 returns: $528 in shipping and processing plus $374 in inventory you can't resell at full price.
Refunded revenue per month
$3,360
On top of the cost above, $3,360 of revenue goes back — $51,149 a year in refunds plus handling at this rate.
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The three costs of a return
Each return carries logistics (return shipping if you pay it, inspection, restocking), inventory loss (the share that can't be resold at full price — opened, worn, damaged or out of season), and the refund. The first two are true costs; the refund is revenue you thought you'd earned.
Cutting the rate versus cutting the cost
The rate falls with better size guides, honest photos and reviews that set expectations. The cost per return falls with store-credit incentives, keep-it refunds on cheap items where return shipping exceeds the product's value, and faster restocking so returned stock sells this season, not next.
Full walkthrough: How to reduce your return rate.
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Frequently asked questions
What is an average return rate for ecommerce?
It varies hugely by category: apparel and shoes run far higher than packaged goods because fit drives returns. Rather than chasing a universal benchmark, track your own rate by product — a handful of SKUs usually drive a disproportionate share of returns, and that's where the money is.
How do I calculate the cost of returns?
Per return: return shipping you pay + processing time + the value of stock you can't resell at full price. Multiply by monthly returns, then add the refunded revenue separately — mixing the two hides which lever (rate, logistics, or recovery) actually needs work.
Should customers pay for return shipping?
It's a trade-off. Free returns raise conversion and are expected in apparel, but they also raise the return rate and you carry the postage. Many stores split the difference: free returns for store credit or exchanges, customer-paid returns for refunds to the original payment method.
When is a keep-it refund cheaper than a return?
When return shipping plus processing exceeds what the returned unit would recover. A $12 item that costs $8 to ship back and can only be resold at a discount isn't worth the round trip — refund it, let the customer keep it, and save the logistics. Set a value threshold and watch for abuse.