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Returns Processing Cost Calculator — Reverse Logistics Cost Per Return

Calculate your true cost to process a returned item. Labour, inspection, restocking, disposition decisions, and reverse shipping — the full reverse logistics picture.

Quick answer: Average e-commerce return processing cost: $10–$20 per item including labour and restocking. Add inbound shipping ($5–$12) and you're at $15–$32 total. High return rates (20–30%) can erode margins severely.

🔄 Returns Processing Cost Calculator

Orders returned ÷ orders shipped × 100
Prepaid return label cost
Receive, inspect, grade, process — ~10–20 min
For calculating write-off on non-restockable
Total Cost Per Return
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Processing Cost
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Monthly Returns Cost
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How to Use This Calculator

  1. Enter monthly return count — and return rate percentage to understand scale.
  2. Enter inbound shipping cost — what you pay per prepaid return label — typically $5–$12.
  3. Enter labour per return — receiving, inspecting and grading typically takes 10–20 minutes at $18–$22/hr.
  4. Set restockable percentage — items that can go back to sellable inventory. Non-restockable items are written off or liquidated.

Worked Example

150 returns/month, $8.50 inbound label, $4.50 labour, 65% restockable, $45 avg item value.

  1. Processing: $8.50 + $4.50 = $13.00
  2. Write-off: 35% × $45 = $15.75
  3. Total per return: $28.75
  4. Monthly: 150 × $28.75 = $4,313
  5. Annual: $51,750

Returns are costing over $51K/year. Reducing return rate by 5 percentage points (better product descriptions, sizing guides, photos) would save ~$17,000/year — a strong case for investing in pre-purchase content.

Frequently Asked Questions

Average e-commerce return rate: 15–20% overall. Fashion/apparel: 25–40%. Electronics: 10–15%. Home goods: 10–20%. B2B: 3–8%. If your rate is above industry average, investigate the top return reasons — wrong size, not as described, and damage in transit are the most actionable.

Options in order of recovered value: repair and restock, sell as open-box at discount, liquidate in bulk to liquidators ($0.10–$0.50/dollar), donate for tax write-off, or destroy. A good returns management policy grades each item on arrival and routes it to the highest-value disposition path.