Returns & Fraud Cost Calculator
Returns don't just cost the refund—they cost shipping, time, restocking loss, and sometimes fraud. Calculate your true "return tax" and the margin buffer you need to stay profitable.
The Hidden Cost of Returns
Protecting Your Margins
Build Return Costs Into Pricing: If your category averages 8% returns and each return costs $12, add ~$1 to every item's price. This "return insurance" protects your margins without hurting competitiveness.
Category Selection Matters: Some categories have structural return problems. Electronics under $50 often have 15%+ return rates with low margins—a losing combination. Vintage clothing has lower returns and better margins. Choose wisely.
Document Everything: Photos of packaging, videos of item function, clear descriptions. This protects you from fraudulent INAD claims and gives you appeal ammunition when buyers lie.
Common Questions
What is the "return tax" in reselling?
The return tax is the average amount you lose per sale due to returns, disputes, and fraud. If you have a 5% return rate and lose $15 per return, your effective "return tax" is $0.75 per sale. This often wipes out slim margins.
What's a realistic return rate for resellers?
Return rates vary by platform and category. eBay average is 8-12%. Poshmark is lower (3-5%) due to the "all sales final" culture. Electronics see 10-15% returns. Clothing 15-25% on regular retail, but lower for curated reselling. This calculator uses category-specific defaults.
What is INAD and why does it matter?
INAD means "Item Not As Described"—a buyer claim that often results in full refunds plus return shipping at your expense, even if you disagree. On eBay, high INAD rates hurt your seller metrics. Budget 2-5% of transactions as INAD risk depending on category.
How much value do I recover from returned items?
Recovery varies: clothing often relists at full price (90-100% recovery), electronics may need testing/refurbishment (50-80%), damaged items may be 0-30%. Items returned "missing parts" average 20-50% recovery. This significantly affects your true return cost.
Related Tools
Return rates and costs vary by platform, category, item condition, and seller practices. These calculations are estimates based on industry averages. Track your actual return data to refine your assumptions.