The Return-Rate Math That Quietly Kills Stores
Returns cost far more than the refund. The math most stores never run — and the line that quietly turns a winner into a loss.
By Jacob
Returns don't just cost you a refund — they cost the original CAC, return shipping, and often the product itself. Most stores never model this, and it's the line that quietly turns a "profitable" SKU into a loss.
The real cost of a return
A returned $30 order can erase the margin on two or three good orders once you add reverse logistics and restocking. If your return rate creeps past 8% on a thin-margin product, paid scaling stops working.
How to bring it down
Better sizing guidance, sharper product photography, and honest copy do more for returns than any policy change. Set expectations accurately and the parcels stop coming back.
Watch these
- Return rate by SKU, not store-wide.
- Reverse-logistics cost per return.
- Restock-vs-write-off rate.
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