The real cost of a refund: what one returned sideboard actually takes off the bottom line
A refund is not the sale price. It is the shipping both ways, the stock you cannot resell, the commission you may not get back, and the hour a person spent on the thread. The full sum for one ordinary order.
What a refund really contains
When a marketplace refunds a customer, the number on the order page is the sale price. That is the smallest part of the loss. Every line below it comes out of your margin, and none of them appear in the refund report the operator sends you.
Take a flat-pack sideboard sold for £240 on a UK marketplace, delivered by a two-man courier, reported damaged on arrival, and collected for return. Here is where the money goes.
The £240 sideboard, line by line
Commission is the quiet one. Most operators return their commission when an order is cancelled before dispatch. On an item returned after delivery, several keep part or all of it, on the grounds that the marketplace did its job. Read the clause; it decides whether a return costs you 15% or 30% more than you think.
- Outbound and return delivery. Two courier legs for a bulky item. The return leg is usually dearer because it is booked as a one-off collection rather than part of a daily run.
- Stock write-off. A damaged flat-pack rarely sells again at full price. Even a “good as new” return typically goes out at 40–60% as an outlet line, and only after someone has inspected and re-boxed it.
- Support time. A damage claim is three to five messages, a request for photos, a courier booking and a refund action. On the threads behind this article that took a median of 1.2 hours of someone’s attention spread over three days.
The second number is the point of this article. The customer did not want their money back; they wanted a sideboard without a cracked door. A replacement panel was six times cheaper than the refund, and it was available on the day the first message arrived.
Which reasons cost the most
Across five UK marketplaces and 90 days, one furniture seller refunded 180 of 6,205 orders (the monthly field note tracks the same numbers month by month). The reasons are the operators’ own refund codes, so the wording differs by marketplace, but three groups dominate.
Change of mind is the largest group and the cheapest per order, because most of those are cancelled before anything ships. Damage is the smallest group and the most expensive, because it carries both courier legs, a write-off and the longest thread. If you can only work on one number, work on damage: fewer than one in ten refunds, but close to a third of the cost.
Where the money can still be saved
Two thirds of the refunded orders had a customer message before the refund. That message is the moment a replacement part, a partial refund or a re-delivery is still cheaper than a return. It is also, very often, the moment nobody is looking: 46% of customer messages in the same data arrived out of business hours, and the biggest gap was Monday morning.
Three things move the number:
- Answer inside the operator’s SLA, in business hours. A customer who waits three days for a first reply asks for a refund; one who gets a reply in an hour asks what you can do. How the clocks work.
- Offer the part before the return. Keep the ten most-damaged components in stock and quote them in the first reply. On the threads behind this article a panel or a fitting pack resolved 4 of 10 damage claims without a collection.
- Know which products are doing it. One dining table in this data was refunded on 3 of 11 orders; the overall rate was 2.9%. That is not a customer problem. Contact rate by product finds them before the refund does.
What to measure every month
Refund rate by product, refund reasons by marketplace, and the share of refunds that wrote in first. If the last number is high, the leak is in your reply time, not your product. If a single SKU sits far above the rest, it is the product or its packaging. If one marketplace is double the others, read that operator’s refund policy again: it may be refunding on your behalf without a conversation.
- A refund on a bulky item costs 60–80% of the sale price once commission, two courier legs, stock and time are counted.
- Damage is under 10% of refunds but close to a third of the cost.
- 64% of refunded orders wrote to you first: that is the window where a part beats a return.
- Track refund rate by product and by marketplace, not just the total.
Questions people ask
Does a marketplace refund its commission when an order is returned?
It depends on the operator and on why the order was refunded. Commission is usually returned on a cancellation before dispatch. On a return after delivery, several Mirakl operators keep part or all of it. The clause is in your operator contract, and it can move the cost of a return by 15 to 30 percent of the sale price.
How do I calculate the true cost of a return?
Add the sale price refunded, the outbound delivery, the return collection, the commission not returned, the write-down on the returned stock, and the support time on the thread at a loaded hourly rate. Subtract whatever the returned item resells for. For bulky goods the result is usually 60 to 80 percent of the sale price.
What is a normal refund rate for marketplace furniture?
In the data behind this article, 2.9 percent of orders were refunded in full or in part over 90 days, ranging from 2.4 percent on one marketplace to 7.8 percent on another. Above about 8 percent on a single product, the product or its packaging is the problem, not the customer.