Free returns ROI calculator

Compare contribution from your current returns policy with a proposed policy. Enter your own costs and conversion assumptions; this tool does not predict a sales increase.

All amounts use the same currency and reporting period. The starting values below are an illustrative example, not benchmarks.

Store visits during the reporting period

Input	Current policy	Proposed policy
Visit-to-order conversion (%)	Current: Visit-to-order conversion (%)	Proposed: Visit-to-order conversion (%)
Fully returned orders (%)	Current: Fully returned orders (%)	Proposed: Fully returned orders (%)
Contribution per retained order	Current: Contribution per retained order	Proposed: Contribution per retained order
Net loss per fully returned order	Current: Net loss per fully returned order	Proposed: Net loss per fully returned order
Fixed policy costs for the period	Current: Fixed policy costs for the period	Proposed: Fixed policy costs for the period

Calculate comparison

What to include

Retained-order contribution: sales revenue less product cost, outbound shipping, payment fees and variable fulfilment costs for an order the customer keeps.

Returned-order loss: unrecovered outbound costs, return transport, handling, non-refundable fees and unrecoverable product value, less any return fees you keep. Do not count refunded revenue as a cost or charge recovered inventory value again. This version accepts a net loss of zero or more.

Fixed policy costs: costs for this reporting period that do not scale per order. Do not also include them in per-order inputs.

Formula and limits

Expected contribution per order = (1 − returned-order fraction) × retained-order contribution − returned-order fraction × returned-order loss.

Period contribution = visits × conversion fraction × expected contribution per order − fixed policy costs.

Break-even proposed conversion = (current period contribution + proposed fixed costs) ÷ (visits × proposed expected contribution per order). Multiply by 100 for a percentage. This increasing-conversion threshold applies only when proposed expected contribution per order is positive.

The model splits orders into fully retained and fully returned orders. It excludes partial returns, exchanges, tax, overhead not entered, repeat purchases and lifetime value. Allow a complete return window before measuring an order cohort. Run a range of conversion and return-rate assumptions; a before-and-after change alone does not establish that the policy caused it.

In the example, current contribution is 5,240 and proposed contribution is 5,351, a change of 111. Increasing the proposed returned-order rate to 25% changes proposed contribution to 4,385 and the difference to −855.

Read the free returns calculation guide or review Forthroute pricing.