Return Rate

Return rate shows how much of your revenue comes back, and each return costs shipping, labor, and often resale value. It drives return policy, size guidance, and how much reverse logistics capacity you need. Rates differ widely by category, so compare by SKU and reason code rather than one blended number. For example, 1,200 units returned out of 10,000 sold is a 12% return rate. If one fit problem causes half of those returns, fixing it could bring the rate down to about 6%.

Return rate = units returned ÷ units sold × 100

Should return rate be measured by units or by orders?

Units is more common because it ties to SKUs and reason codes, but order-level return rate shows how many customers had a problem. State which one you use and keep it consistent.

How do you calculate return rate?

Divide units returned by units sold in the same period and multiply by 100. Because returns lag sales, many brands match returns to the month the original orders were placed.

How can a brand lower its return rate?

Fix the top reason codes first. Better size charts, fit notes, photos, and accurate descriptions address the biggest causes in apparel and footwear.

• Reverse LogisticsMoving goods from customers back to the brand
• DispositionWhat happens to a returned item
• Damage RateShare of orders that arrive damaged
• Cost per ReturnTotal cost of handling one return
• Exchange-First ReturnsOffering an exchange before a refund
• Restocking FeeCharge deducted from a refund
• Return Reason CodeCode that records why an item came back
• Return WindowTime allowed to return an item