Return Rate
How many orders come back to you. Not the same as refund rate — a return might become an exchange or store credit instead of a cash refund. E-commerce averages 20-30%. Fashion? Often over 30%.
Example
You ship 500 orders this month, 125 come back. Return rate = 25%. If processing each return costs you $12 (inspection, repack, restock), that's $1,500/month in labor and materials you didn't budget for.
Why It Matters
A high return rate doesn't just eat margin — it eats time. Every return pulls your team away from fulfilling new orders. If 1 in 4 orders comes back, a quarter of your labor is spent undoing sales instead of making them.
Pro Tip
Tag your top 3 most-returned SKUs in Shopify and read the return reasons. It's almost always a sizing issue, bad product photo, or misleading description. Fix one of those and your return rate drops 5-10% within a month.
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