What is the return rate?
The return rate shows how much of your sales comes back. Returns cost you twice: the revenue disappears, while shipping, handling and sometimes markdowns remain as costs.
How do you calculate it?
Divide the number of units returned by the number of units sold, over the same orders. If you use euros, divide the revenue refunded by the revenue of those orders.
Example: of 200 units you sold in March, 30 come back. The return rate in units is 30 ÷ 200 = 15%. If those orders brought in €10,000 and you refunded €1,200, the return rate in revenue is 12%.
What to watch out for
Returns arrive weeks after the sale. If you look at last week, the rate looks low because the returns have yet to come. So calculate per sales period, and look per product and per channel: that is where the big differences are.
In Ecommy
Ecommy links returns and refunds to the original order, so they count in the profit of the product, the channel and the campaign.