A fake return loss calculator helps ecommerce sellers estimate how much money they may lose each year to fraudulent, wrong-item, used, damaged or empty-box returns. Most sellers know fake returns hurt, but few have put a number on it. Use the formula and examples below as a starting point, then replace the sample figures with your own return data for a more realistic estimate. Most sellers know fake returns hurt, but few have put a
number on it. Once you do, the decision to use a VMS becomes simple.
The formula
Yearly loss = orders per day × 365 × return rate ×
share of returns that are fake or wrong × average loss per bad return
Average loss per bad return is what you lose when a
claim fails: product cost, two-way shipping and any marketplace penalty.
Worked example 1: small fashion seller
Input | Value |
Orders per day | 50 |
Return rate | 20% |
Share of returns that are fake, | 5% |
Average loss per bad return | ₹600 |
50 × 365 × 20% × 5% × ₹600 = ₹1,09,500 a year lost.
Worked example 2: electronics seller
Input | Value |
Orders per day | 100 |
Return rate | 8% |
Share of returns that are fake or | 6% |
Average loss per bad return | ₹2,500 |
100 × 365 × 8% × 6% × ₹2,500 = ₹4,38,000 a year
lost.
These are example numbers. Use your own return rate and
loss figures for a true picture.
What a VMS changes
A clear, AWB-linked packing video, plus a return
unboxing video, lets you file and win more of these claims. Even if video proof
recovers only half of these losses:
•
Example 1 recovers about ₹54,750 a year
•
Example 2 recovers about ₹2,19,000 a year
ClaimVMS starts at ₹5,000 a year with unlimited
videos, so in both examples the licence pays for itself many times over.
How to find your real numbers
1.
Export last quarter’s returns from each seller panel
2.
Count returns marked wrong item, used, damaged or empty
3.
Divide by total returns to get your bad-return share
4.
Average the product cost plus shipping for those
returns
Frequently asked questions
What percentage of ecommerce returns are fraudulent?
It varies widely by category and marketplace. Calculate
your own share from your return data for an accurate figure.
Is a VMS worth it for a small seller?
If fake returns cost you more than ₹5,000 a year, a
flat-fee VMS like ClaimVMS usually pays for itself.
What counts as a loss per return?
Product cost you can’t resell, forward and return
shipping, and any penalty or fee you can’t recover.
See your saving with your own numbers
Book a free
demo and we’ll run the calculation with you.
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