Calculator

Return Rate Profit Calculator

A product can look profitable before returns and still fall apart once refund drag is treated honestly. Use this calculator to see how a return rate changes the expected profit left on each original order.

Start from baseline order profit before returns
Layer in reverse logistics and restocking drag
See how returns compress the real margin

Calculate profit after returns

Enter order revenue, direct costs, fee rate, return rate, return shipping, and restocking or refurbishment drag. The calculator estimates expected profit after returns on an average original order.

Order revenue Gross order revenue before return pressure. Product cost Direct product or COGS for the order. Fulfilment cost Outbound fulfilment and delivery cost. Fee rate % Combined marketplace or payment take on revenue. Return rate % Share of orders expected to be refunded or returned. Return shipping cost Reverse logistics or label cost on returned orders. Restocking or refurb cost Inspection, refurbishment, or repackaging drag. Ad cost Acquisition cost you want included before returns.

Three return pressure scenarios.

Formula

What the return model assumes

Expected return drag = Return rate × (Baseline profit before returns + Return shipping + Restocking cost)

This model assumes a returned order gives back the baseline profit it would have created and adds reverse logistics drag on top. It is a decision model, not a refund accounting statement. The point is to make return pressure visible before traffic or scaling decisions are made.

Where teams get surprised

Return-heavy categories can kill margin even when payout initially looks fine.
Reverse logistics rarely shows up in the same report as order profit.
ROAS targets set before return drag are usually too generous.

Useful next step

Once return drag is visible, compare it against payout margin and break-even ROAS so the order is judged on what survives after both channel and refund pressure.