Return Cost Calculator
Returns cost more than the refund. Estimate the true monthly hit and your effective margin after unsellable returns.
True cost of returns / month
The detail behind it
Returned units / mo
—
Refunds issued / mo
—
Effective margin
—
How the math works
Returned units = (GMV ÷ price) × return rate. Each returned unit refunds the full price; resale recovery is the share you can resell.
True cost = COGS lost on the units you can't resell. Effective margin = (gross profit minus true cost) ÷ GMV.
The real cost of returns
A refund is only the visible part of a return. The hidden cost is the product itself: when a returned unit can't be resold as new, you've eaten its full COGS for zero revenue. At scale that quietly erodes margin more than most sellers realise.
Resale recovery is the lever. If half your returns can be resold at full value, you only lose COGS on the other half. Better packaging, accurate listings and good photos all push that recovery rate up and the true cost down.
This calculator estimates returned units, refunds issued, the true COGS cost of unsellable returns, and your effective margin once returns are accounted for.
Frequently asked questions
Why do returns cost more than the refund?
Because a returned unit you can't resell means you paid to make or buy it and got nothing back. That lost COGS, multiplied across many returns, is the real cost, on top of refund processing.
What is resale recovery?
The share of returned items you can resell as new (or near-new). Higher recovery means you only lose COGS on the rest, sharply lowering the true cost of returns.
How do I reduce return costs?
Lower the return rate with accurate listings and clear photos, and raise resale recovery with protective packaging; both shrink the unsellable, COGS-eating portion.
Is it free?
Yes, free with no signup; it runs in your browser.
Related