Cost of returns calculator

Work out what each return really costs you, how much monthly profit they take away and what provision you should set aside per order so you stop kidding yourself about your margins.

Last updated: August 21, 2026Free · No sign-up≈ 3 minutes

Market: United StatesCurrency: USDTax: sales tax configurable

Your numbers

Your volume

Monthly orders

Total orders you take in a normal month.

Average order value

What the customer pays on average.

Return rate

Share of orders that end up returned.

Costs of the sale and the return

Product cost

What the goods in an average order cost you.

Outbound shipping paid by the business (optional)

The outbound leg you absorb, not the one you charge the customer.

Return shipping (optional)

What it costs to bring the parcel back, if you pay for it.

Advanced options

The more you fill in here, the closer the result gets to your real P&L.

Tax

Does the amount include sales tax?

Yes, it is the final priceNo, it is already tax-exclusive

sales tax rate

Rates in force in United States. Only applied if you said the amount includes tax.

Custom sales tax rate

Enter the percentage that applies in your case.

Province or territory (optional)

Pick your province or territory to load the combined rate, or leave it unselected and enter a custom one.

Costs of the sale

Packaging (optional)

Payment gateway percentage (optional)

Payment gateway fixed fee (optional)

Share of the gateway fee you do not get back (optional)

Many gateways keep their fee when you refund. If yours returns it in full, enter 0.

Other variable costs of a sale (optional)

Costs of the return

Inspection and processing cost (optional)

Warehouse time: opening, inspecting, relabelling and restocking.

Share of the product you cannot recover (optional)

The part that arrives damaged, used or otherwise unsellable.

Other costs of a return (optional)

Customer service, goodwill vouchers, special collections…

Every calculation runs in your browser. The figures you type are never sent to a server and are never stored.

This calculator needs JavaScript. The maths runs in your browser — that is why your figures never leave your device — so it cannot work with JavaScript turned off. The rest of the page (formulas, worked examples and explanations) reads exactly the same.

Your results will appear here

Enter your monthly orders, average order value and return rate.

Check the market and currency in the settings bar.
Enter your volume and main costs.
Refine the advanced options: the unrecovered gateway fee and the unsellable share move the result a lot.

Results are estimates based on the information you enter. Fees, taxes and platform terms can change: always check the figure that matters to you against your invoice or the official platform. They do not replace your real invoices, your official accounts or professional tax, financial or legal advice.

In most spreadsheets a return shows up as revenue reversed. That would be true if the money travelled back the way it came, and it does not: the outbound leg already shipped, the gateway fee often stays where it is, the packaging was destroyed on opening, and somebody has to spend time inspecting what comes back.

Counting only the return shipping — the most visible cost — usually means booking less than a third of the real impact.

The six costs of a return

1. The outbound leg you already paid for

It left the warehouse, it reached the customer, and that money does not come back. If you charged for shipping, you will also have to refund it.

2. The return leg

If you offer free returns, you pay it. The one cost almost everybody counts.

3. The gateway fee you do not recover

On refund, many gateways return only part of their fee, or none. Worth checking in your provider's terms: on small baskets, where the flat part weighs heavily, it moves the result quite a bit.

4. Packaging

The box, the filler and the labels are not reusable.

5. Warehouse processing

Receiving, opening, checking condition, relabelling, restocking and handling the refund. If you do not have the figure, estimate the minutes per return and multiply by your hourly cost.

6. The goods you cannot resell

Worn clothing, opened cosmetics, damaged boxes, incomplete items. In some categories it is a small share; in others half the return turns into inventory loss.

Direct cost of a return = outbound shipping + packaging + unrecovered gateway fee + return shipping + processing + unrecoverable product + other return costs

Why it hurts twice as much as a lost sale

Compare two scenarios with the same customer. In the first they do not buy: you gain nothing and lose nothing. In the second they buy and return: you gain nothing and pay the direct cost.

But the comparison that really matters is against the order that sticks, because that is the real alternative:

Impact of a return = contribution of the kept sale <- what you do not earn + direct cost of the return <- what you pay extra

At a 19.77 contribution and a 14.05 direct cost, the gap between an order that sticks and one that comes back is 33.82. In other words: it takes 1.7 new sales just to offset one return.

The real cost of returns in ecommerce →

Frequently asked questions

What is a normal return rate?

It varies so much by sector and channel that any general figure misleads, and we are not going to invent one. Measure yours (returns in the month over orders in the month) and compare it against your own trend and against your maximum sustainable rate, which is a number specific to you.

Does the gateway refund its fee when I issue a refund?

It depends on the provider and the transaction type: some return the percentage part but not the flat one, others nothing. Worth checking in your own terms, because on small baskets it can be the second-largest cost of the return.

How do I estimate the unrecoverable share?

Ideally count it for a month: out of every 100 units returned, how many go back to A-grade stock, how many to outlet and how many are written off. Without that record, start conservative and refine it once you have data.

Should I include my own time in the processing cost?

Yes. If you do it yourself, the cost is your time and it is real: those are hours you are not spending selling.

What about partial refunds?

The calculator models full returns, which is the most expensive case. For a partial refund, a reasonable approximation is to reduce the order value and the product cost proportionally while keeping the transport and processing costs whole.

Do returns affect my advertising campaigns?

Considerably, and invisibly: platforms count the conversion, not the later return. Your CPA per kept sale is worse than the dashboard shows. Putting the provision per order into the ROAS calculator corrects that bias.