Refund Rate

The refund rate is a measure of the number of returns that result in a refund.

A high refund rate is often a sign of customer disappointment, which may be due to damaged products, poor quality, deviations from photos or products that do not meet expectations. Ultimately, it may even be wise to stop selling certain products if they are frequently returned for a refund.

How do you calculate the Refund Rate?

The refund rate is calculated by dividing the number of refunded orders in a given period by the total number of orders in the same period.

How do you lower the Refund Rate?

To lower the refund rate, it is important to make the ordering and return process as responsive as possible to customers' needs.

You do this by, among other things, getting the quality and accuracy of product descriptions and images as high as possible and by providing a customer-friendly return process that includes the possibility of exchanges to encourage repeat purchases.

Adjusting your return policy and choosing to offer paid returns can also lower the refund rate and is easy to justify if you do offer free exchanges, for example.

In addition, it is valuable to collect and analyze customer feedback to address any problems or shortcomings in products or services to increase customer satisfaction and minimize returns.

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