How to use this calculator
- Enter or choose average refunded order value.
- Enter or choose refunds per month.
- Enter or choose payment fee not returned.
- Enter or choose fixed payment fee not returned.
- Enter or choose refund or chargeback fee.
- The cost per refund updates as you type. Use Copy result or Share to keep it.
Method
Cost per refund = Order × Fee% + Fixed fee + Refund fee + Return shipping + Minutes ÷ 60 × Hourly rate + Product cost × Unsellable%
- Fee%
- payment fee kept by the provider when you refund
- Unsellable%
- share of returned items that must be written off
Worked example
- 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.
Each refund costs about 17.54 on top of the money returned, 29% of the order value, or 2,104.80 a month.
What the result means
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 and limits
- 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.
- Customer-service time, restocking fees charged to customers and recovery from liquidation are not included; add them to the inputs if relevant.
Questions
Do payment providers return their fee when I refund?
Policies differ by provider and change over time. Check your provider’s current terms and enter 0 if fees are returned.
Is a chargeback the same as a refund?
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.