Getting a handle on your Returns Rate

With January wrapping up, most of your holiday returns will have been sent in by now. That makes this a good time to dig into how your returns and exchanges went for the year.

Figuring out how many orders resulted in a return can be straight-forward. For this you'll want to use your Returns Rate.

Divide the number of returns by the total number of orders. It'll be a decimal number from 0 to 1.

1,000 returns
10,000 orders

= 0.1 which is 10%

Did 1% of your orders return an order? 5%? 10%?

10% might sound high but you need more information: how has that changed from the year before?

Going from 1% to 10% in a year is a clear sign of a problem. Going from 20% to 10% is a clear improvement. Same measurement (10%) but it's the degree of change that matters.

Handle the returns right and you can still keep the customer.

Eric Davis

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Topics: Returns rate

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