Important Details for Return Rate

Important Details for Return Rate

It’s a few months from now, but around January, as reverse logistics peak in nearly all areas of online commerce, noise will inevitably begin to spread about these rising returns rates. This happens every year – return rates always go way up after the holiday season is finished, then naturally return to normal.

At Reverse Logix Logistics, we’re here to help you handle this kind of seasonal volume without any hassle. We regularly find that there are a lot of misconceptions about return rate within our industry – let’s set the record straight with some simple basics.

Not Just One Rate

There is not a single return rate for a given company or set of products. Classic return rate is simple: The number of returned products as a percentage of the number of total shipped products.

Within online retail, however, things aren’t only this simple. Yes, companies do track their classic return rate – these will vary from one to 60 percent, depending on the product category. But for the most success in this area, you should actually be looking at three different return rates, which we’ll go over in our next sections.

Return Refund Rate

Return refund rate is the percentage of all returned and refunded products as a percentage of shipped products. Because these returns are refunded and result in zero sales, they’re often the largest issue and draw the primary concern.

Partial Return Rate

The percentage of partially returned orders as a percentage of all shipped orders. Because not all shipped products have been returned and there is still a sale on the order, this is a slightly less problematic return.

Return Exchange Rate

The percentage of returned and exchanged products as a percentage of all shipped products. Returned products that are exchanged are the least problematic category – there is still a sale, and there’s even the possibility for a larger sale than the original if the exchanged product is more expensive.

Returns Management

Calculating these percentages will help you to do a more detailed evaluation of your return rate. Doing so requires excellent returns management services, however – and that’s what we’re here for. For more on our returns management software or any of our other services, speak to the pros at Reverse Logix Logistics today.