What is the refund rate?


Editorial team Published on

A refund rate is the percentage of paid transactions or sales revenue that a business returns to customers.

📊 Definition & Formula

  • By transactions: (Refunded Transactions / Total Paid Transactions) x 100
  • By revenue: (Total Refund Amount / Total Sales Revenue) x 100
  • Cohort tracking: Attribute refunds to the original purchase month, not the refund date.

📉 Industry Benchmarks

  • General e-commerce: Around 1.4% to 1.7% of total orders.
  • Apparel & clothing: Higher at roughly 6.5% due to fit issues.
  • Amazon sellers: Averages around 6%, depending on the category.