Work out warranty return rate instantly with clear inputs, formula shown and shareable results.
Warranty return rate is returns as a percentage of units shipped over the warranty term. Expressing it per million units and per month of exposure makes cohorts of different volumes and warranty lengths comparable, which is essential when a warranty period changes.
Return rate
Return rate % = returns x 100 / units shipped; PPM = returns / shipped x 1,000,000
Cost
Warranty cost = returns x cost per return
Returns arrive months after shipment. A calendar-month return rate mixes cohorts and hides whether the product is getting better or worse. Track returns by month of manufacture instead.
Replacement or repair cost, freight both ways, diagnosis labour, administration and any goodwill credit. Indirect brand damage is real but usually excluded from the accounting figure.