Work out returns processing cost instantly with clear inputs, formula shown and shareable results.
Returns processing cost is labour time plus repackaging and restocking materials. Because inspection and grading are judgement tasks that resist automation, labour dominates — which is why reducing return rates is far more effective than processing them faster.
Labour cost
Labour = Returns x Minutes per return / 60 x Loaded hourly cost
Cost per return
Per return = (Labour cost + Repackaging cost) / Returns processed
Grading decisions, testing electricals, cleaning and repackaging to a saleable standard. Simple size-exchange returns are much faster.
Better size guidance and product imagery, accurate descriptions, and identifying products and customers with abnormal return rates.