What is Return %?

What is Returns %?

Definition:

Returns % is calculated as:
Refund Value ÷ Gross Sales × 100

It represents the percentage of revenue lost due to refunds, providing a clear view of how returns are affecting your bottom line.

Why Returns % Matters

High return rates can significantly reduce profitability — even if sales appear strong. Monitoring your Returns % helps you:

• Spot problem products or categories

• Identify operational issues (e.g., sizing, quality)

• Improve customer satisfaction and reduce churn

How to Reduce Return Rates

1. Identify Return Trends

Dig into the reasons for returns. Are customers saying the item didn’t match the photos? Was sizing inconsistent?

Tip: Use this insight to inform product development, buying decisions, or vendor negotiations.

2. Improve Product Descriptions

Ensure your product pages set clear and accurate expectations. High-quality images, detailed specs, and customer reviews all help.

Tip: Include sizing charts, usage instructions, or comparison tools where relevant.

Tracking Returns % Over Time

Keeping an eye on your return rate can help you:

• Flag quality issues early

• Track the impact of changes to your website, policies, or suppliers

• Measure improvement as new processes or product strategies are implemented

--> Access all Metrics cheatsheet here.