eCommerce Return Rate: 2025 Product Category Benchmark & Tips
In eCommerce, the rate of return refers to the percentage of items customers send back compared to the number of items sold. High return rates can significantly impact profit margins, conversion rates, and overall business viability.
For a quick and free check on your profit margin, try our Profit Margin Calculator.
How you handle returns before and after purchase can differentiate your brand and create a competitive advantage. In this guide, we’ll explore industry benchmarks and proven strategies to help you reduce return rates and enhance your bottom line. Let’s dive in!
What Is Rate of Return (RoR)?
The rate of return (RoR) measures how often customers send back purchased items. It’s calculated as a percentage of the total products sold within a specific period.
eCommerce return rates can vary widely depending on two main factors:
- Product categories – Items like apparel and electronics generally have higher return rates.
- Return policy flexibility – More lenient policies can lead to increased returns but may also boost customer satisfaction.
To accurately gauge the impact of your eCommerce return rate, consider it within the broader context of customer behavior and your returns management strategy.
E-commerce return rates by product categories
Understanding these benchmarks helps you set realistic expectations and tailor your return policies accordingly.
3 Key Factors Influencing E-commerce Return Rates
Understanding why customers return products can help you implement effective strategies to reduce return rates. Here are the main drivers:
1. Shopping Behaviors
Customer purchasing habits, such as “bracketing” (buying multiple sizes or styles to try at home), significantly contribute to returns—63% of consumers admit to this practice. Additionally, free shipping thresholds can encourage customers to over-purchase, leading to higher return rates.
Tip: Set clear return policies for bulk purchases or offer store credit for returns to reduce bracketing without compromising the customer experience.
2. Seasonal Peaks
Returns often spike during holiday seasons, with a rate of 17.9% compared to the usual 16.5% for eCommerce. This increase is largely due to gift returns and impulse purchases.
Tip: Segment holiday returns to identify patterns and adjust your return management strategies accordingly.
3. Product Categories and Return Reasons
Return rates vary by product category. For instance, apparel sees high return rates due to issues like wrong size or fit, while electronics are more affected by damages or inaccurate descriptions. According to the Narvar Consumer Report 2022, the top reasons for returns include:
- Wrong Size, Color, or Fit – Particularly impactful for clothing and footwear.
- Product Not as Described – Leads to unmet expectations and dissatisfaction.
- Damaged Items or Late Delivery – Often due to controllable logistics or quality issues.
- Changed Mind or Dislike – Harder to address but can be minimized with accurate product descriptions and images.
Tip: Analyzing return reasons by category helps you optimize product descriptions, improve sizing guides, and refine return policies, ultimately reducing return rates.
To accurately measure the financial impact, calculate your Cost Per Order to see how returns affect your overall expenses.
How Much Does Rate of Return Cost You?
While “free returns” attract customers, they’re costly for merchants. In fact, reverse logistics can cost 66% of the item’s original price (CNBC). Rising customer expectations add to this expense:
- 72% expect refunds within five days.
- 69% want free return shipping.
- 49% check return policies before buying.
- 52% abandon purchases due to complicated return processes.
Returns also hit profit margins hard—only 48% of returned products are resold at full price, impacting revenue and brand reputation. To understand the full financial impact, explore how to calculate Operating Income and see how returns influence your overall profitability.
In summary, return costs consist of much more than simply preparing items for return to store shelves. Merchants will have to bear the cost of lost sales and customer loyalty.
How to Measure Your Return Rate in E-commerce?
Track your e-commerce return rate with this formula:
Rate of Return = (The amount of returned units / The total amount of sold units) x 100
Your overall e-commerce return rate doesn't reveal the number of returns that could have been avoided with appropriate intervention or the number of returns that were converted into exchanges. It is essential to analyze your e-commerce return rate by breaking it down into two important metrics: refund rate and exchange rate.
For example, if you sold 20,000 units and 5,000 were returned, your return rate is 25%.
To get more insights, break down your return rate into:
- Refund Rate – High rates may indicate unmet expectations or poor product descriptions.
Refund Rate = (Number of refunded items / Total number of sold items) x 100
- Exchange Rate – High rates suggest customer loyalty or product issues.
Exchange Rate = (Number of exchanged items / Total number of sold items) x 100
Want to see how returns affect your dropshipping profitability? Learn more about How to calculate profit for a dropshipping business (shopify-based).
How to Reduce E-commerce Return Rates?
Understand Why Customers Return Products
When a customer initiates a return, ask for the reason and offer support. This insight helps you identify issues and find effective solutions.
Describe your products in detail
Unclear product descriptions often lead to returns. In fact, 9 out of 10 shoppers find product content crucial when buying online. To minimize confusion:
- Focus on the three most important features and benefits.
- Clearly explain the return process.
- Include any relevant product details.
- Avoid overwhelming customers with too much information as this can lead to decision fatigue.
Provide Alternative Products or Store Credit
Instead of processing a return, offer an alternative product of equal value or store credit. This approach:
- Encourages exchanges instead of refunds.
- Gives customers the flexibility to choose other items.
- Helps you retain revenue while enhancing customer satisfaction.
Make your return policies obvious
Ensure your return policy is easy to access, such as in the website footer and on product pages. To build trust:
- Clearly state the return window and conditions.
- Specify which items are eligible for returns and any exceptions.
- Offer a self-service returns system to make the process hassle-free.
Simplify your return process
A complicated return process frustrates customers and harms your brand's reputation. Keep it simple to boost customer satisfaction. According to Narvar, 96% of customers are more likely to buy again if the return experience is easy.
By making returns straightforward, you turn a potential negative into a chance for growth and loyalty. Your order value can also get higher thanks to your optimized return process.
Can There Be a ‘Good’ Product Rate of Return?
A low return rate doesn’t always mean satisfied customers. If complicated return policies or forced store credits are used to discourage returns, the numbers might look good, but customer loyalty could suffer.
Easy, hassle-free returns are key to retention. In fact, 92% of shoppers would buy again if the return process is simple. Viewing returns as a growth tool can boost revenue and loyalty. Even frequent returners can be valuable customers—they often buy more and stay loyal if the experience is positive.
Don’t just focus on reducing returns. A balanced rate of returns and exchanges shows customers feel confident and satisfied with their experience.
David Sobie, CEO and co-founder of Happy Returns, shares that retailers' most profitable customers are those who make returns more frequently than average. They make substantial purchases and also return items regularly, but most importantly, they remain loyal to the brand.
Final Words
Understanding your eCommerce return rates is crucial—but it's just one piece of the puzzle. With TrueProfit, you can accurately track how returns impact your profit margins, ensuring you’re always aware of the true cost of doing business.
Discover what proper profit-tracking looks like at trueprofit.io
Tracy Ng
Tracy Ng – Senior Content Executive at TrueProfit & SEO/Content Specialist Tracy is a senior content executive at TrueProfit - specializing in helping eCommerce businesses scale profitably through content. She has over 4 years of experience in eCommerce and digital marketing editorial writing. She develops high-impact content that helps thousands of Shopify merchants make data-driven, profit-focused decisions.
