Adjust profit for refunds and returns on your sales.
Refunds return the buyer's money but the costs of goods and shipping are usually lost too, so real profit drops more than the refund alone. High return categories like apparel can erase half of gross profit, making refund-adjusted margin the honest number behind marketing decisions.
Refund-Adjusted Margin
Adjusted margin = (gross profit - refunds) / net revenue x 100
Adjusted margin = (gross profit - refunds) / net revenue x 100 Refunds return the buyer's money but the costs of goods and shipping are usually lost too, so real profit drops more than the refund alone.
High return categories like apparel can erase half of gross profit, making refund-adjusted margin the honest number behind marketing decisions.
This calculator takes 3 inputs: Gross revenue, Refund rate, Gross margin. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.