What is Return rate?
Return rate shows what share of sold or shipped items is returned. Returns affect net demand, available stock, cash flow, and forecasts. In fashion especially, expected returned units must be timed correctly.
Formula
Return rate = returned units ÷ shipped units
Practical example
Of 2,000 shipped units, 360 are returned. The unit return rate is 18 percent.
What teams should remember
- Return rate shows what share of sold or shipped items is returned.
- Returns affect net demand, available stock, cash flow, and forecasts. In fashion especially, expected returned units must be timed correctly.