Is this calculator specific to Shopify?

The math is ecommerce-specific and works especially well for Shopify stores because it includes the costs Shopify merchants usually need to model: COGS, payment fees, shipping, returns, ad spend, inventory, conversion rate, or repeat purchases depending on the tool.

Should I use gross margin or contribution margin?

Use contribution margin when you are making advertising, discount, or growth decisions. Gross margin is useful, but contribution margin is stricter because it accounts for variable costs like payment fees, fulfillment, shipping, returns, and app costs.

Why does the tool use default values?

Defaults make the calculator useful immediately and show the shape of the result before you enter your own numbers. Replace them with your store's actual numbers before making a final decision.

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Return Cost Calculator

Calculate the true cost of ecommerce returns from return rate, reverse shipping, restocking, resale markdown, AOV, and margin.

Return cost calculator

Estimate the monthly profit loss from returns, including lost gross profit, reverse shipping, restocking, and markdowns.

Monthly orders

Average order value

Gross margin

Return rate

Reverse shipping

Restock / inspection cost

Resale markdown

Total monthly return cost

$5,720

Returned orders

Return cost per order

$5.72

Lost gross profit

$3,758

Handling cost

$990.00

Add return cost per order to product economics. High-return products often look profitable until reverse logistics and markdown recovery are included.

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About this tool

What this free tool calculates

Use this for apparel, beauty, accessories, and any product where returns quietly destroy contribution profit.

How to use the result

The calculator estimates returned orders, returned revenue, lost gross profit, reverse logistics cost, resale markdown loss, and return cost per order.

If return cost per order is high, improve product pages, sizing guidance, post-purchase education, or return policy economics before scaling ads.

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Why the calculator stays input-driven

This free ecommerce tool does not guess demand, scrape competitors, or invent benchmarks. Change the numbers to match your store, then use the result to decide whether a product, campaign, discount, or inventory move is worth doing.

Frequently Asked Questions

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