The Return Loss
Americans returned about $850 billion last year (NRF), and online, roughly one in five orders comes back. A return is not a neutral event, it is a refund plus a cost. Here is the margin math most brands never do, and why Amazon, Walmart, and Target now tell you to just keep it.
Your return rate is not a number on a dashboard. It is a second business, and you are running it at a loss. Last year Americans returned about $850 billion of merchandise, a 15.8% rate that runs to 19.3% online (NRF).
A return is a refund plus a cost: you refund the sale, then pay to ship, inspect, restock, or write it off, which Optoro estimates can eat a quarter to a third of the item's price. The tell is that Amazon, Walmart, and Target now issue returnless refunds, because getting a cheap item back costs more than the item. Measure net margin after returns, fix the top return reason at the source, and segment who and what returns. Stop counting orders. Start counting orders that stay.
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