Product Return Rate

Definition

Product return rate is the percentage of sold items that are returned to the business.

Why is it useful?

This rate helps you determine product effectiveness and customer satisfaction, and how it changes over time. It is very useful to identifying opportunities for innovation, or even new markets you could target.

Example of Use

A rise in number of returns indicate a fall in customer satisfaction or a fall in the product quality. Looking into what items were returned, and how often can help you identify the key reasons why people were unhappy. It could mean you need to shift your product mix, or target a different audience to sell more successfully. It could also mean that the buying process itself can be improved.

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