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Return Rate
eCommerce
Logistics
What is Return Rate?
The return rate measures the rate at which shipped items are returned.
Return Rate Formula
Return rate = total items returned / total items shipped
Return Rate Unit
Return Rate is expressed as a percentage (%).
Calculation example
For example, if your store sold 1,000 items last month and 50 of those were returned, your return rate would be:
Return Rate = (50 / 1.000) x 100 = 5 %
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More about Return Rate
Understanding the return rate is essential for any business that deals with physical products, especially in the e-commerce industry. The return rate represents the percentage of products that customers return after purchase. A high return rate can indicate various issues such as product quality, inaccurate descriptions, or poor customer satisfaction. Here’s a closer look at what return rate means and how you can manage it effectively.
How to visualize Return Rate?
The KPI Return Rate can be visualized as a data card, showing the current value. Or you can use bar charts to see trends and to compare your current value with previous time periods.
Return Rate visualization examples
Return Rate

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Recommendations to improve Return Rate
- Analyze return reasons: Identify the reasons why customers are returning products. Common reasons include wrong size or fit, damaged items upon delivery, inaccurate product descriptions, or quality issues.
- Improve product descriptions and imagery: Provide accurate and detailed product descriptions, including size charts, dimensions, and material information. High-quality images from multiple angles can also help set realistic expectations.
- Enhance quality control: Implement rigorous quality control measures to ensure products meet or exceed customer expectations. This includes inspecting products before shipment and during packaging to minimize the likelihood of defects.
- Offer clear return policies: Clearly communicate your return and exchange policies on your website. Make it easy for customers to understand how to initiate a return or exchange, including providing a hassle-free process and offering options like prepaid return labels.
- Collect and analyze return data: Continuously monitor return data to identify trends and patterns. Use this information to make informed decisions about product selection, quality improvements, or changes to policies that could reduce return rates.