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Returns Leak Calculator
A returns leak is the revenue and cost that drains out of your business through returns every year: the refunds themselves plus the price of moving, inspecting and restocking everything that comes back. Enter three numbers and see yours.
Your numbers
Nothing is stored. The math runs in your browser.
Ecommerce averages 15 to 20%. Fashion commonly runs 20 to 30%+.
The rest convert to exchanges or store credit and stay revenue.
Your annual returns leak
$777,600
9,000 returns a year carrying $720,000 of revenue.
Kept by going exchange-first
$64,800
If 19% of returns convert to exchanges or store credit, the share Switch Nails holds on Pango.
Saved by fewer refunds
$123,120
A refund rate falling like Switch Nails' did (2.08% to 1.69%) removes about a fifth of the refund leak.
Recoverable with an exchange-first operation
$187,920 / year
That plugs about 24% of the leak.
Estimates based on published Pango merchant results and industry cost models. Your product mix, markets and policies change the math, which is exactly what a demo scopes.
How the math works
The calculator uses four transparent steps. Annual returns are your monthly orders × 12 × return rate. Returned revenue is annual returns × average order value. The refund leak is the share of that revenue leaving as refunds. The operational leak is modeled at 18% of order value per return, covering the label, transport, receiving, inspection and restocking, the cost stack we break down in the true cost of a return.
The recovery estimates are anchored on published results, not hypotheticals: on Pango, Switch Nails keeps 19% of returns as exchanges or store credit (71,108 SEK retained) and cut its refund rate from 2.08% to 1.69%, with 99% of returns running fully self-serve.
Return rate benchmarks
| Category | Typical return rate |
|---|---|
| Ecommerce overall | 15 – 20% |
| Fashion & apparel | 20 – 30%+ |
| Footwear | Top of the fashion range |
| Beauty & personal care | Lower, but rarely restockable |
Deeper category data: what a good ecommerce return rate looks like and fashion return rates.
How brands plug the leak
The leak closes in four moves, and each one is an operation, not a setting.
1 · Make exchanges the easy path
Offer an exchange to any product or store credit before the refund. The sale stays in the business and the customer still gets what they wanted.
How a return management system does this →2 · Stop paying for pointless journeys
When return transport costs more than the item, a returnless refund with smart rules beats shipping it back to destroy it.
When returnless refunds make sense →3 · Run the backward supply chain properly
Fast receiving, inspection and restock decisions are where frozen inventory and refund delays hide.
Reverse logistics, explained →4 · Buy software by the back half
The portal is the easy part. Warehouse sync, per-country policy rules and tracked return transport are what actually move the leak.
How to choose returns management software →Live merchant results
Switch Nails plugged the leak with Pango
A beauty brand where most returned product cannot be restocked, which makes keeping the revenue the whole game. On Pango's exchange-first returns, run by AI agents on one record with tracking and delivery.
Read the case study →19%
of returns kept as exchanges or store credit
71,108 SEK
retained instead of refunded
2.08% → 1.69%
refund rate
99%
of returns fully self-serve
Returns leak questions, answered
Everything the calculator assumes, in plain language.
A returns leak is the yearly revenue and cost that drains out of an ecommerce business through returns: money refunded to customers, plus the operational cost of transporting, receiving, inspecting and restocking every returned item. Most brands only track the refund line, which is why the full leak is usually bigger than they think.
Annual returns = monthly orders × 12 × return rate. Returned revenue = annual returns × average order value. The refund leak is the share of that revenue leaving as refunds, and the operational leak is modeled at 18% of order value per return for transport, receiving, inspection and restocking. The total leak is the two added together.
Overall ecommerce return rates typically run 15 to 20%. Fashion commonly runs 20 to 30% or higher because of size and fit, footwear sits near the top of that range, and categories like beauty run lower but often cannot restock what comes back. The benchmark that matters most is your own trend by category and market.
The biggest lever is an exchange-first flow: offering an exchange to any product or store credit before a refund, so the sale stays in the business. Switch Nails, a beauty brand running returns on Pango, keeps 19% of returns as exchanges or store credit and cut its refund rate from 2.08% to 1.69%, with 99% of returns fully self-serve.
Yes, it is free, ungated and runs entirely in your browser. Nothing you type is stored or sent anywhere.
They are estimates anchored on published Pango merchant results and standard industry cost models, not guarantees. Product mix, markets, policies and fraud pressure all move the numbers, which is why the calculator is the starting point and a scoped demo is the real answer.
The calculator estimates it. A demo scopes it.
Bring your real orders and policies and we will show the leak, and the fix, on your own data.
Book a demo →