Expected returns

expected_returns

Description

The value of the items sold that we expect customers to send back. It is worked out for each order line on the day the order is placed. It is not the Refunds already paid.

When to use

Use it to see what returns will take from sales before they come back. It matters most when return rates differ a lot between products. To see returns that already came back, use Return rate (value) or Refunds. For a new product, use the rate of a similar product until it has its own.

Formula

For each order line, its Net sales times the product's return rate. Leave out items already refunded. Net sales has taken those off. The return rate comes from the product's past orders. Use the rate for the customer's country where it differs. Lower the line's value as days pass with no return. Add up all lines.

Category

Profit