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E-commerce Returns Cost & Profit Calculator

Estimate expected contribution after customer returns, including reverse freight, inspections, resale recovery, refund rate and payment fees.

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Adjust any value to calculate instantly. Or press Calculate to spotlight your result.

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A practical guide

How this calculator works

Online orders that seem profitable at checkout can lose money after refunds, return postage and unresellable goods. Model both a successful sale and a fully refunded returned sale to understand average profit.

What the calculation does

Calculate the contribution of a kept order and a fully refunded order separately, weighting each by the percentage of orders you expect to be returned.

The basic formula
Kept profit = sale price − unit cost − outbound fulfillment − percentage fee − fixed fee. Returned profit = recovered value − unit cost − outbound fulfillment − return shipping − inspection − fixed fee. Expected profit = kept profit × (1 − return rate) + returned profit × return rate.

Important limitations

Assumes percentage payment fees are refunded and fixed fees are not. Partial refunds, marketplace-specific fee policies, advertising, taxes, and overhead are excluded.

Common questions

Why can returns reduce profit so dramatically?

Returned items often lose the sale while still incurring outbound shipping, reverse shipping, inspection, and inventory costs.

What is recovered value?

The expected usable resale or liquidation proceeds from a returned product.

Do all platforms refund payment fees?

No. The model documents its assumption; check your provider's current fee-reversal policy.

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