What is the return rate formula?
There are three common versions. They answer slightly different questions, so say which one you mean:
- Item (unit) return rate = units returned ÷ units sold × 100. Best for comparing products and variants.
- Order return rate = orders with at least one returned item ÷ total orders × 100. Best for workload: each of these orders is a return to handle.
- Revenue return rate = value of returned items ÷ gross sales × 100. Best for finance: how much sales value comes back.
Return rate (%) = returned ÷ sold × 100
Shopify’s own reports use the item version: its returned quantity rate is the percentage of a line item’s ordered units that were physically returned, returned quantity ÷ ordered quantity (Shopify sales reports).
Worked example
Example numbers, not benchmarks. One quarter for a small apparel store:
| Quarter | Sold | Returned | Return rate |
|---|---|---|---|
| Units | 1,000 | 60 | 6% |
| Orders | 400 | 48 with a return | 12% |
| Revenue | $24,000 | $1,800 | 7.5% |
Same store, three different numbers. The order rate is higher because many orders hold several items and one returned item makes the whole order count. The revenue rate is above the item rate here because the pricier items came back more often. Neither is wrong; just don’t compare one store’s order rate with another’s item rate.
Which time period should you use?
Returns arrive weeks after the sale, so a “returns this month ÷ sales this month” rate mixes old orders with new ones and swings with seasonality. Two cleaner options:
- Cohort: take the orders placed in a month, wait until your return window has closed, then count how many of those orders came back.
- Rolling: use a longer window (a quarter or 90 days) for both returns and sales, so the timing gap matters less.
Count refunds that came with no item back (a lost parcel, a goodwill refund) separately. They cost money, but they aren’t returns.
Where to find your return rate in Shopify
- Returned quantity and return reasons: Shopify’s sales report docs show how to view returns by product, and the returned_quantity metric counts units physically returned, with the return reason for each line item (Shopify sales reports; ShopifyQL returns schema).
- Careful with “reversed quantity”: in the Orders and reversals by product report it includes refunds, returns, cancellations and order edits, so a reversed quantity rate will usually be higher than your true return rate (Shopify order reports).
Split the rate by product and by return reason. A size-related reason on one product points to a size chart fix; damage points to packaging or the carrier.
From return rate to what returns cost you
A rate on its own doesn’t tell you whether returns are a problem. Multiply it out:
Monthly returns = orders × return rate · Monthly return cost = returns × cost per return
Cost per return is more than the refund: the return label if you pay it, exchange shipping, staff time, packaging, items you can’t resell and payment fees you don’t get back. On Shopify Payments, the original card fee isn’t returned when you refund (Shopify Payments refunds). The refund policy guide works one example through line by line; the return cost calculator does it with your own numbers and shows each formula.
Once you can see the cost, the levers are usually your policy (who pays return shipping, exchanges or store credit first) and the top return reasons. Claimify Our own app logs returns with their reasons inside the Shopify admin and handles return labels, exchanges and store credit; ParcelWILL affiliate link covers tracking, shipping protection and returns.
See what your returns cost each monthEnter your orders, return rate, label cost, handling time and write-offs. See cost per return and per month, with every formula shown.Open the return cost calculator