It costs more per parcel than forward logistics, because pickups are less predictable and returned items need inspection, repacking or write-off. For fashion and footwear, exchanges can make up a large share of total shipping.

Count reverse logistics in contribution margin, not in overheads, so products with high return rates carry their true cost.

Work it out: RTO cost

What cash-on-delivery returns cost you each month, per RTO and per COD order, and the prepaid incentive that pays for itself.

Related terms

Part of the growth marketing glossary by Shiva Sharma.