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What do returns really cost my store?

A return is more than the refund. Enter your own numbers to see what return labels, exchanges, handling time, packaging, unsellable stock and payment fees add up to each month, with every formula shown.

Your own numbers
Every formula shown
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Affiliate disclosure: some links on this page are affiliate links. If you buy through them, StoreVetted may earn a commission at no extra cost to you. Claimify is our own app and is labelled as such. How we make money.

Every default below is an example, not a benchmark. Replace them with your own numbers.

1Orders and returns per month

1,000

Average order value ($) Product cost per order ($) Return rate (% of orders)

→ 100 returns/mo. Product cost = what you paid for the goods in an average order (COGS).

2How returns are resolved

% refunded to the original payment % exchanged (you ship a replacement)

The rest (15%) = store credit or gift card.

3Shipping and packaging

% of returns where you pay the label Cost of a return label ($) Outbound shipping per exchange ($) Packaging/materials per return ($)

4Handling time

Support minutes per return Warehouse minutes per return (receive, inspect, restock) Cost of an hour of staff time ($)

5Write-offs and fees

% of returned items you can’t resell Payment fee you don’t get back on refunds (%) Restocking fee you charge on refunds (%)

Payment fee: check whether your processor returns its fee on refunds. If it does, enter 0.

Calculating…

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How the math works

Returns per month = orders × return rate. Then each cost line is:

Return labels = returns × % you pay for × label cost
Exchange shipping = returns × % exchanged × outbound shipping
Staff time = returns × (support + warehouse minutes) ÷ 60 × hourly cost
Packaging = returns × packaging cost
Unsellable items = returns × % you can’t resell × product cost per order
Payment fees kept = returns × % refunded × order value × fee %
Restocking fees (subtracted) = returns × % refunded × order value × restocking fee %

Refunded revenue is shown for context but is not counted as a cost, because the sale is reversed and the item comes back. Items you can’t resell are counted once, at product cost.

Simplifications: one average order per return, and partial resale value (outlet, B-stock) isn’t modelled. If you resell some items at a discount, raise the % you can’t resell to match the value you lose.

Read the guide: Shopify refund policy example: a return policy template you can copy

Read the guide: How to calculate your ecommerce return rate

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Log every return and claim in one place.

The free Claims Ops Kit Lite gives you a claims and returns log in Excel or Google Sheets, 10 reply macros and an evidence checklist, so you can see which products and reasons drive your returns.

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FAQ

How do I calculate what a return costs my store?

Add up what you pay because the order came back: the return label (if you pay for it), the outbound shipping on any exchange, the staff time to answer the customer and to receive, inspect and restock the item, packaging, the product cost of items you can’t resell, and any payment processing fees you don’t get back on the refund. Subtract restocking fees you charge. This calculator shows every one of those lines with the formula next to it.

Is the refunded money counted as a cost?

No. A refund reverses the sale and the item comes back, so the calculator shows refunded revenue separately for context and only counts what the return actually costs you. Items that can’t be resold are counted at their product cost.

Are the default numbers industry averages?

No. Every default is an example so the tool shows a result straight away. Replace them with your own numbers from Shopify (or your platform), your shipping software and your helpdesk.

Do payment processors return their fees when I refund?

It depends on the processor and the plan, so check yours. If your processor keeps its fee on refunded orders, enter that fee as a percentage; if it returns it, enter 0.

Which apps help with returns?

Claimify (our own Shopify app) handles returns, damage and warranty claims in the Shopify admin, including printable return labels, exchanges as draft orders and store credit instead of a refund. ParcelWILL by CWILL covers tracking, shipping protection and returns. Compare current features and pricing on each vendor’s site.

Are the links affiliate links?

Some are. Links marked “affiliate link” are sponsored and StoreVetted may earn a commission at no cost to you. Claimify is our own app and is not an affiliate link. Recommendations follow fixed rules based on your inputs.