METHOD & GUIDANCE
How this calculation works
Enter figures from the same period and on a consistent VAT-inclusive or VAT-exclusive basis. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Model returns by product category and sales channel, then compare retained contribution rather than judging the return rate in isolation.
Worked example
At 2,000 orders, 65 average order value and a 12% return rate, the opening case refunds an estimated 15,600 of revenue before processing cost.
Common mistakes
- Using item returns with an order-based denominator.
- Assuming every return has the average order value.
- Ignoring lost shipping, inspection, fraud and markdown costs.
Frequently asked questions
Is this calculator free?
Yes. It requires no account and stores no calculation inputs.
Can I use the answer for a formal filing?
No. It is a planning estimate, not accounting, tax, legal or investment advice. Confirm material decisions with a qualified professional.
Should I include VAT?
Use a consistent basis throughout. Businesses that recover input tax commonly model net figures; consumer-facing prices are often considered gross.
Continue the decision
- Average Order Value Calculator — Connect order value with margin, repeat buying and CAC.
- Marketplace Take Rate Calculator — Turn GMV and take rate into platform revenue and contribution.
Method reviewed 26 July 2026. Figures are illustrative and calculated locally in your browser.