RTO cost calculator
Is RTO eating my profit? What undelivered orders cost you every month, including the ads that bought them.
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Is RTO eating my profit?
YES
Full breakdown
Three fixes for your numbers
- Prepaid discount for high-RTO pin codes
- WhatsApp confirmation on every COD order
- Exclude repeat-RTO buyers from targeting
See the full breakdownThe numbers behind your answer and three fixes, also sent to your WhatsApp.
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Book a callHow it is calculated
Worked through with the typical numbers already in the calculator.
What you get
- How many orders come back undelivered
- Shipping, packing and ad spend lost each month
- What a 5-point RTO cut would save
| Step | Formula | Result |
|---|---|---|
| Orders returned undelivered | 3,000 orders × 22% | 660 |
| Shipping and packing lost | 660 × (₹70 + ₹70 + ₹25) | ₹108,900 |
| Ad spend on undelivered orders | 660 × ₹350 | ₹231,000 |
| RTO cost a month | Shipping lost + ad spend lost | ₹339,900 |
What a good number looks like
COD orders return at 1.8 to 2.3 times the rate of prepaid orders for the same products. Payment method predicts returns better than product quality.
| COD return rates by category in India | |
|---|---|
| Fashion and apparel | 25 to 40% |
| Footwear | 20 to 30% |
| Beauty and personal care | 18 to 22% |
| Home and décor | 15 to 20% |
| Sports and fitness | 12 to 16% |
| Electronics | 10 to 15% |
| Health and wellness | 8 to 12% |
This page was updated in October 2026 and reviewed by our senior marketing team. Source: Base, COD return rates by product category in India (2026).
Mistakes that make this number wrong
We see these in most accounts we audit.
Counting only shipping
RTO also ties up stock for weeks and can damage products in transit.
One rate for every region
RTO varies a lot by state, city and pin code. An average hides where the losses are.
Mixing RTO and returns
RTO is never delivered. Returns are delivered, then sent back. Each has a different fix.
Ignoring payment method
COD orders return far more often than prepaid ones, so the payment mix changes the answer.
How to improve it
These are the four levers we pull first, and the service behind each one.
Lever 1
Prepaid offers where RTO is high
A small prepaid discount in the worst pin codes usually pays for itself.
Fixed by website conversionLever 2
Confirm every COD order
WhatsApp confirmation before dispatch catches fake and impulse orders.
Fixed by retention marketingLever 3
Stop buying RTO with ads
We exclude repeat-RTO buyers and pin codes from targeting.
Fixed by performance marketingLever 4
Fix the reasons people refuse
We fix delivery times, size information and order tracking messages.
Fixed by website conversionDefinitions and questions
What is RTO?
Return to origin: an order shipped but never delivered, usually a refused COD order.
Why include ad spend?
You paid to win that order and got nothing back, so the ad cost is part of what RTO costs you.
What is a healthy RTO rate?
It depends on your category and your COD share. Fashion often sees 25 to 40% on COD orders, while electronics sees 10 to 15%. The benchmark table on this page shows the ranges by category.
Is RTO the same as a return?
No. RTO is an order that never reached the customer, usually refused or undeliverable. A return happens after delivery. Both cost money; RTO also wastes the ad spend that won the order.
Which pin codes have the highest RTO?
It differs by brand. Your own order data shows it in a day. We sort pin codes by RTO and volume in the free audit.
What numbers do I need?
You need orders shipped a month, your RTO rate, forward and return shipping, packing cost and ad cost per order.
How do I cut RTO?
Confirm COD orders on WhatsApp, offer prepaid incentives in high-RTO pin codes and stop targeting repeat-RTO buyers.
Why is COD RTO so much higher?
COD orders return at 1.8 to 2.3 times the rate of prepaid orders, because nothing is paid up front (Base, 2026).
Does RTO affect my ad performance?
Yes. Ad platforms count the order when it is placed, so RTO makes campaigns look better than they are.
How much could I save?
The calculator shows what a 5-point cut in RTO would save you each month, using your own numbers.
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