Refund-Adjusted Margin
Adjust profit for refunds and returns on your sales.
About Refund-Adjusted Margin
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.
Formula
Refund-Adjusted Margin
Adjusted margin = (gross profit - refunds) / net revenue x 100
- refund rate
- Share of gross revenue eventually refunded
Worked example
With the default values below, Refund-Adjusted Margin returns Refunded Amount of $8,000.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Gross revenueminimum 0
- 100,000
- Refund rateaccepts 0–100 %
- 8 %
- Gross marginaccepts 0–100 %
- 40 %
Results
- Refunded Amount
- $8,000.00
- Profit After Refunds
- $32,000.00
- Adjusted Margin
- 34.78%
Step by step
- 1Values used
- 2Refund-Adjusted Margin
- 3Refunded Amount= 8,000.00
- 4Profit After Refunds= 32,000.00
- 5Adjusted Margin= 34.78
Assumptions and limits
- The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Refund-Adjusted Margin calculated?
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.
Why does Refund-Adjusted Margin matter?
High return categories like apparel can erase half of gross profit, making refund-adjusted margin the honest number behind marketing decisions.
What values do I need to enter?
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.