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    Return Rates

    Return rates measure the frequency or percentage of item returns within a given period.

    What Are Return Rates?

    Because product returns can impact a business’ inventory management, sales, and budgetary processes, it’s important for them to frequently monitor their return rate. Return rates measure the percentage of item returns as compared to the number of units sold.

    Keeping a close eye on return rates is particularly important for ecommerce businesses. Because online shoppers can’t handle the product in person, they will sometimes engage in “bracketing,” or buying multiple sizes of a product, for example, with the intention of returning one or more after trying the products on.

    That’s why it’s important that businesses consider return rates in conjunction with other sales, marketing, and product initiatives. Giving customers clear, helpful product descriptions alongside images and videos of a product can help them avoid bracketing.

    Ecommerce businesses today should make return rate a key performance indicator (KPI), setting a particular percentage goal and measuring regularly to determine their success.

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