{
    "name": "Refund Processing Cost Calculator",
    "url": "https://calculators.geekmidst.com/calculators/refund-processing-cost-calculator",
    "markdown": "https://calculators.geekmidst.com/calculators/refund-processing-cost-calculator.md",
    "category": "Commerce & retail",
    "description": "Add up what each refund really costs beyond the money returned: payment fees not given back, return shipping, handling time and unsellable stock.",
    "summary": "Refunding the order is only part of it. Payment fees are often not returned, someone pays for the return label and handling, and some returned items cannot be resold.",
    "also_called": [
        "Return processing cost calculator",
        "Cost per return calculator"
    ],
    "applies_to": "Worldwide",
    "last_updated": "2026-10-29",
    "computation": "Results are computed in the visitor’s browser on the HTML page. This API describes the calculator; it does not compute results.",
    "inputs": [
        {
            "name": "order_value",
            "label": "Average refunded order value",
            "type": "number",
            "default": "60"
        },
        {
            "name": "refunds",
            "label": "Refunds per month",
            "type": "number",
            "default": "120"
        },
        {
            "name": "fee_pct_lost",
            "label": "Payment fee not returned",
            "type": "number",
            "default": "2.9",
            "unit": "%",
            "optional": true
        },
        {
            "name": "fee_fixed_lost",
            "label": "Fixed payment fee not returned",
            "type": "number",
            "default": "0.30",
            "optional": true
        },
        {
            "name": "refund_fee",
            "label": "Refund or chargeback fee",
            "type": "number",
            "default": "0",
            "optional": true
        },
        {
            "name": "return_shipping",
            "label": "Return shipping you pay",
            "type": "number",
            "default": "7.50",
            "optional": true
        },
        {
            "name": "handling_minutes",
            "label": "Handling time per return",
            "type": "number",
            "default": "12",
            "unit": "min",
            "optional": true
        },
        {
            "name": "hourly_rate",
            "label": "Labour cost per hour",
            "type": "number",
            "default": "18",
            "optional": true
        },
        {
            "name": "product_cost",
            "label": "Product cost (COGS) per order",
            "type": "number",
            "default": "22",
            "optional": true
        },
        {
            "name": "unsellable_pct",
            "label": "Returns that cannot be resold",
            "type": "number",
            "default": "20",
            "unit": "%",
            "optional": true
        },
        {
            "name": "currency",
            "label": "Currency",
            "type": "currency",
            "default": "USD"
        }
    ],
    "outputs": [
        {
            "key": "cost_per_refund",
            "label": "Cost per refund",
            "format": "currency"
        },
        {
            "key": "monthly_cost",
            "label": "Monthly cost of refunds",
            "format": "currency"
        },
        {
            "key": "cost_pct",
            "label": "As % of the refunded order",
            "format": "percent"
        },
        {
            "key": "fees_lost",
            "label": "Payment fees lost",
            "format": "currency"
        },
        {
            "key": "labour_cost",
            "label": "Handling labour",
            "format": "currency"
        },
        {
            "key": "write_off",
            "label": "Stock written off (average)",
            "format": "currency"
        }
    ],
    "formula": {
        "text": "Cost per refund = Order × Fee% + Fixed fee + Refund fee + Return shipping + Minutes ÷ 60 × Hourly rate + Product cost × Unsellable%",
        "variables": {
            "Fee%": "payment fee kept by the provider when you refund",
            "Unsellable%": "share of returned items that must be written off"
        }
    },
    "worked_example": {
        "inputs": {
            "order_value": "60",
            "refunds": "120",
            "fee_pct_lost": "2.9",
            "fee_fixed_lost": "0.30",
            "refund_fee": "0",
            "return_shipping": "7.50",
            "handling_minutes": "12",
            "hourly_rate": "18",
            "product_cost": "22",
            "unsellable_pct": "20",
            "currency": "USD"
        },
        "steps": [
            "Fees lost = 60 × 2.9% + 0.30 = 2.04.",
            "Labour = 12 ÷ 60 × 18 = 3.60; write-off = 22 × 20% = 4.40.",
            "Per refund = 2.04 + 7.50 + 3.60 + 4.40 = 17.54.",
            "Monthly = 17.54 × 120 = 2,104.80."
        ],
        "result": "Each refund costs about 17.54 on top of the money returned, 29% of the order value, or 2,104.80 a month."
    },
    "interpretation": "If the cost per refund is a large share of the order, reducing returns (better sizing, photos, descriptions) is often worth more than cutting handling time. For low-value items, a refund without return may be cheaper.",
    "assumptions": [
        "The refunded amount itself is excluded: it reverses the sale.",
        "Write-off is the product cost times the share of returns that cannot be resold."
    ],
    "limitations": [
        "Customer-service time, restocking fees charged to customers and recovery from liquidation are not included; add them to the inputs if relevant."
    ],
    "rules": null,
    "faqs": [
        {
            "question": "Do payment providers return their fee when I refund?",
            "answer": "Policies differ by provider and change over time. Check your provider’s current terms and enter 0 if fees are returned."
        },
        {
            "question": "Is a chargeback the same as a refund?",
            "answer": "No. A chargeback is a dispute through the card issuer and usually carries an extra fee; enter it in the refund or chargeback fee field."
        }
    ],
    "sources": [],
    "related": [
        {
            "name": "Payment Gateway Fee Calculator",
            "url": "https://calculators.geekmidst.com/calculators/payment-gateway-fee-calculator"
        },
        {
            "name": "POS Cash Reconciliation Calculator",
            "url": "https://calculators.geekmidst.com/calculators/pos-cash-reconciliation-calculator"
        },
        {
            "name": "Profit Margin Calculator",
            "url": "https://calculators.geekmidst.com/calculators/profit-margin-calculator"
        }
    ],
    "disclaimer": null,
    "publisher": "GM¹X CalcVerse"
}