Reverse Logistics Cost Calculator — Total Returns Program Cost

Calculate your total reverse logistics cost as a percentage of revenue. Direct processing, transportation, inventory loss, and system costs — get the full picture of your returns program.

Quick answer: Reverse logistics costs 2–8% of revenue depending on industry. Retail: 5–8%. Industrial B2B: 2–4%. E-commerce fashion: 8–12%. Most companies undercalculate by ignoring system, management, and markdown costs.

🔄 Reverse Logistics Cost Calculator

Annual Revenue ($)

Return Rate (% of units sold)

Average Unit Value ($)

Processing Cost Per Return ($)

Receive, inspect, grade, route

Return Shipping Cost Per Unit ($)

Inventory Written Off (%)

% of returns that can't be resold at full price

Average Markdown on Non-Full-Price Units (%)

Annual System/Admin Cost ($)

Returns portal, RMA system, management overhead

Annual Reverse Logistics Cost

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As % of Revenue

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Annual Returns Volume

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How to Use This Calculator

Enter revenue, return rate, and unit value — to calculate annual return volume.
Enter per-unit direct costs — processing (receive, inspect, grade, route) and return shipping.
Set write-off and markdown percentages — the inventory value loss from returns not resold at full price.

Worked Example

$15M revenue, 12% return rate, $55 avg unit, $8.50 processing, $9 return shipping, 25% write-off, 50% markdown, $45K system.

Annual returns: 32,727 units
Processing + shipping: $572,727
Inventory loss: $225,000
System: $45,000
Total: $842,727 = 5.6% of revenue

At 5.6%, you're at the high end of normal for e-commerce. Reducing returns from 12% to 9% saves ~$200,000/year — better product descriptions, sizing guides, and quality control.

Frequently Asked Questions

Direct: return shipping (prepaid label), receiving, inspection, grading, restocking or refurbishment. Indirect: inventory markdown/liquidation loss, system costs (returns portal, RMA system), management overhead, customer service escalation time.

Prevention first: better product descriptions, customer photos, sizing guides reduce returns at the source. Process second: customer-graded returns routing, consolidated return centres, faster processing. Disposition: better liquidation channels for non-restockable items improve recovery value.