Operations & Fulfillment
Return Rate
The percentage of sold items that are returned by customers. Average e-commerce return rate: 20-30%.
Formula
Return Rate (%) = (Returned Orders / Total Orders) × 100What is Return Rate?
Return rate measures what percentage of orders or items sold are returned by customers. E-commerce has significantly higher return rates than brick-and-mortar retail, with fashion being the worst offender.
Why Returns Destroy Profit
Returns don't just cost you the sale — they incur return shipping, restocking labor, and often the item can't be resold at full price. A 30% return rate can cut your effective margin in half.
Reducing Return Rate
- Improve product descriptions and sizing guides
- Add high-quality images and videos
- Include customer reviews and Q&A
- Offer virtual try-on where applicable
Example
1,000 orders shipped, 180 returned. Return rate = 18%.
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