Return Rate Impact Calculator
How product returns erode your real profit per order.
About this calculator
Returns are a stealth cost: each one wipes out the profit of the sale and adds return postage, handling and often a write-down. This calculator blends your return rate into a single expected profit per order — the honest number to use in ad and pricing decisions.
The formula
Worked example
Price £35, costs £20 (profit £15), 12% returns costing £6 each: expected profit = 0.88×15 − 0.12×6 = £12.48 — returns cost £2.52 per order on average.
Common mistakes
- Running ROAS targets on gross profit while a 15% return rate eats the real margin.
- Treating every return as fully resellable when many are written down or scrapped.
- Accepting a high return rate as fixed — sizing guides and honest photos measurably cut it.
Frequently asked questions
Assumptions & limitations
Refund equals full price; partial refunds and exchanges land somewhere better than modelled.
Sources & verification
This calculator applies the standard formula published above to the figures you enter — it relies on no external statutory data. The formula and the worked example were checked by hand against each other.
Spotted an error or an out-of-date figure? Report it — corrections are prioritised over all other work (see our corrections policy).