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Return Rate

What is Return Rate?

Your ecommerce site’s return rate reflects the rate at which customers return their purchased items to your store. You can calculate your store’s return rate by simply comparing the amount of items sold during a given period with the amount of items returned for that same period and multiplying by 100 (for the percentage). Return Rate formula: Amount of Items Returned / Amount of Items Sold x 100 = Return Rate.

How to reduce Return Rate

Using your analytics tools to find your average return rate over a given period is an important practice. Combining your return rate with thoughtful segmentation by products or discount codes can help you understand which customers are more likely to encounter issues with their products and make returns. This can lead to several improvements for your store. First, you can use this information to figure out which of your pages may have product descriptions or product photos that may be falling short. A lot of times when customers don’t have a correct representation of the product they are going to receive, you’ll have a higher return rate. Otherwise, you can figure out other patterns within your return data. Did you run a certain type of sale that drove in a higher volume of orders but then experienced a high return rate of those products? If so, you may want to cap your % of discounts at a certain threshold since buyers are quicker to buy with less caution when prices are lower, which means they may have a higher likelihood of making a return.