Returns Processing Cost Calculator
Calculate the true financial cost of customer e-commerce returns, including return shipping labels, inspection labor, unrefunded payment fees, and damaged inventory losses.
Return Logistics & Write-Off Factors
Return Cost Formula
Cost Per Return = Return Postage + Inspection Labor + Gateway Fee + Repackaging + (Damaged Product Cost × Damaged %)- Return Postage: Prepaid return shipping label paid by the merchant (USPS/UPS).
- Inspection & Restocking: Labor time to open, inspect for wear, re-fold, and restock items.
- Unrefunded Gateway Fees: Credit card processors (Stripe, Shopify) do not refund the initial 2.9% + $0.30 processing fee upon issuing refunds.
- Inventory Damage Loss: Depreciation or total write-off when items are returned damaged, stained, or broken.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Merchant pays return shipping under a free customer return policy.
- Processor retains original transaction processing fees per standard payment terms.
Frequently Asked Questions
Do credit card processors return fees when an order is refunded?
No. Since 2019, major payment processors (including Stripe, PayPal, and Shopify Payments) keep the original processing fee (2.9% + $0.30) when an order is refunded to the customer.
What is an average return rate in e-commerce?
General e-commerce returns average 15% to 20%, but online apparel frequently experiences 25% to 40% return rates due to customer size bracketing (buying multiple sizes to try on at home).
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