Return Rate Profit Impact Calculator
Estimate how product returns affect retained orders, revenue and contribution profit.
Model return-rate impact
Enter order economics and expected return behaviour to see how much contribution may be lost.
How the calculation works
The model separates kept orders from returned orders. Kept orders retain their normal contribution. Returned orders are assumed to refund their sale revenue, incur the entered return-processing cost, and recover only the chosen share of product/fulfilment cost through resale or restocking.
How to use the result
Use the result to compare products, channels or policies with different return rates. A seemingly healthy front-end margin can weaken when return shipping, inspection, damage, repackaging and unrecoverable inventory are material.
Assumptions and limitations
This is a planning model rather than a full accounting statement. Real returns may involve partial refunds, exchanges, non-refundable shipping, marketplace fee reversals, taxes, varying recovery values and repeat-purchase effects.
Example
Try the same order economics at several return rates to see how sensitive contribution is to return behaviour.