How do you calculate the return rate of your shipped products?

1 What is the return rate formula?

The return rate formula is a simple way to measure how many products you ship out and how many come back to you. It is calculated by dividing the number of returned products by the number of shipped products and multiplying by 100 to get a percentage. For example, if you shipped 1,000 products in a month and received 100 returns, your return rate would be 10%. The lower your return rate, the better your performance and profitability.

2 Why is the return rate important?

The return rate is important because it reflects your customer satisfaction, your product quality, and your shipping efficiency. A high return rate can indicate that your customers are unhappy with your products, that your products are defective or damaged, or that your shipping process is slow or inaccurate. A high return rate can also hurt your reputation, increase your expenses, and reduce your inventory turnover. Therefore, you should aim to keep your return rate as low as possible and monitor it regularly.

3 How to track your shipped products and returns?

To track your shipped products and returns, you need to have a reliable and accurate system that records and updates the status of each order. You can use a software tool, such as an order management system, a shipping software, or a customer relationship management system, to automate and streamline your tracking process. You should also communicate with your customers and provide them with tracking information, confirmation emails, and return policies. This way, you can reduce confusion, prevent errors, and improve customer loyalty.

4 How to analyze your return rate data?

To analyze your return rate data, you need to look beyond the overall percentage and dig deeper into the reasons and patterns behind the returns. You can use a spreadsheet, a dashboard, or a report to segment and visualize your data by different criteria, such as product category, customer segment, return reason, return method, or time period. This way, you can identify the main drivers and sources of your returns and spot any trends or anomalies.

5 How to lower your return rate?

To lower your return rate, you need to address the root causes of your returns and implement strategies to prevent or reduce them. This can include improving product quality and testing before shipping, providing clear and accurate product descriptions, images, and specifications, offering free samples, trials, or guarantees to reduce risk and uncertainty, setting realistic expectations and delivering on your promises, providing easy and flexible return options and policies, and collecting and acting on customer feedback and reviews. By doing this, you can calculate the return rate of your shipped products to improve your shipping and receiving performance as well as customer satisfaction.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?