Returns cost calculator
A return costs more than the refund suggests and less than many calculators claim. See the real cost per return and what your return rate does to break-even ROAS.
Example numbers. Replace them with yours.
- Cost of returns per month
- USD 7,260
- Cost per return
- USD 60.50
- Break-even ROAS without returns
- 1.84×
- Break-even ROAS with returns
- 2.28×
- Return rate where profit hits zero
- 62.8%
What it calculates
When an order is returned you lose the margin you would have made and you pay shipping both ways and handling. If the item can be resold, you get the stock back, so the refund itself is not the loss. This calculator counts what you actually lose per return and shows how a return rate raises the ROAS your ads need.
How to read the result
The gap between the two break-even ROAS numbers is what returns add to every ad target. If your return rate is close to the max return rate, the store makes almost nothing before ads. Raise the resold share only if returned items really go back on sale.
Learn the metric:Return rateBreak-even ROAS
The formula
Margin per order = AOV − COGS − shipping out
Out of pocket per return = shipping out + return shipping + handling
+ COGS × (1 − resold %)
Cost per return = Margin + out of pocket
Kept per order = (1 − rate) × margin − rate × out of pocket
Break-even ROAS = AOV ÷ kept per order
Max return rate = Margin ÷ (margin + out of pocket)Worked example
Example inputs
- Orders per month
- 1,000
- Return rate
- 12%
- Average order value
- USD 70
- Product cost
- USD 25
- Shipping out
- USD 7
- Return shipping
- USD 6
- Handling per return
- USD 2
- Returned stock you resell
- 70%
Results
- Cost of returns per month
- USD 7,260
- Cost per return
- USD 60.50
- Break-even ROAS without returns
- 1.84×
- Break-even ROAS with returns
- 2.28×
- Return rate where profit hits zero
- 62.8%
What changes the result
Return rate at five values. Every other input stays as in the worked example; the highlighted row is the example.
| Return rate | Cost of returns per month | Break-even ROAS with returns |
|---|---|---|
| 6% | USD 3,630 | 2.04× |
| 9% | USD 5,445 | 2.15× |
| 12% | USD 7,260 | 2.28× |
| 15% | USD 9,075 | 2.42× |
| 18% | USD 10,890 | 2.58× |
Use your real numbers
Analify reads returns and refunds from Shopify and return results from connected couriers, and subtracts them in Blended Profit and nROAS after returned orders.
Analify already reads 6 of these 8 inputs live, from Shopify · Courier
Start freeRelated calculators
Questions
How much does a return cost an online store?
The margin you lose on the sale, plus shipping both ways, handling and any stock you can't resell. The refund is not a cost when the item comes back to be sold again.
How do returns affect ROAS?
Returns lower what each order keeps, so you need a higher ROAS to break even. This calculator shows both break-even ROAS numbers.
What return rate is too high?
The one where profit per order before ads reaches zero. The calculator shows it as the max return rate.
Do you store what I enter?
No. The calculation runs in your browser and nothing is sent to Analify.
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