Refund Impact on Profit Calculator
Ad spend is wasted on refunded orders too.
Monthly cost of refunds
$21,692
8.9% of revenue
Advertising is spent on gross orders including the refunded ones, so a 12% refund rate wastes $4,092 of ad spend on top of the lost contribution. Getting to 8% is worth $86,769 a year.
How the Refund Impact on Profit Calculator works
Advertising is spent on gross orders including the ones later refunded, so a refund wastes the acquisition cost as well as the contribution. That is why a 12% refund rate takes considerably more than 12% off the bottom line.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
How much do refunds cost beyond the revenue?
The contribution you would have made, the advertising already spent winning the order, and the cost of processing the refund. Together they typically exceed the contribution itself.
Why is ad spend wasted?
Because it was spent to acquire an order that no longer exists. The platform does not refund it, and the customer is unlikely to return soon.
How do I reduce the refund rate?
Accurate product information first, then delivery expectations, then quality. Most refunds are expectation mismatches rather than genuine faults.
Should I net refunds off revenue in reporting?
Yes, but not only that. Report the full cost — contribution lost plus wasted acquisition plus processing — because netting alone makes the problem look a third the size it is.