Return Rate Calculator
Return rate by orders and by value, and what returns actually cost once handling is counted.
Return rate can be measured by order count or by value, and the two differ whenever returns skew toward expensive items — which in fashion and electronics they usually do.
How the return rate calculator works
Return rate can be measured by order count or by value, and the two differ whenever returns skew toward expensive items — which in fashion and electronics they usually do. Quoting one without saying which is a common source of confusion.
The cost is more than the refund. Return shipping, inspection, repackaging, and the share of returned goods that cannot be resold at full price all add up, and the last is the largest for apparel. A 20% return rate with a 40% resale write-down costs far more than the headline suggests.
Online returns run substantially higher than in-store, and jurisdictions with statutory cancellation rights higher still. That is a structural feature of selling online, not a fault in the operation.
Formula: return rate = returns / orders; cost = refunds + handling + write-down
Worked examples
| Inputs | Return rate by orders | Note |
|---|---|---|
| 216 returns from 1,200 orders | 18% | 18% by orders, 21% by value |
| No write-downs | 18% | handling only |
| A low return rate | 2% | 2% |
FAQFrequently asked questions
What is a normal online return rate?
Broadly 15 to 30% in apparel and lower in most other categories. Online consistently runs above in-store.
Should I measure returns by order or by value?
Both. They diverge when returns skew toward expensive items, which in fashion and electronics they usually do.
What do returns actually cost?
The refund plus return shipping, inspection, repackaging, and the write-down on goods that cannot be resold at full price — often the largest part.
Why are online returns so much higher?
Because customers cannot try before buying, and in many jurisdictions a statutory cancellation right applies to distance sales.
How do I reduce returns?
Better sizing information, more and better photography, and accurate descriptions. Restricting returns usually costs more in lost sales than it saves.
Where these figures come from
- APICS / ASCM — inventory management terminology — the turnover, safety stock and reorder point definitions used here
- Australian Competition and Consumer Commission — the Australian consumer law regulator
Last checked: September 2026. These are standard retail and inventory-management definitions.