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Free Returns Calculator
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GOAL
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Goal of this model is to create an easy way for anyone to calculate the impact of a free return offer on consumer behaviour.
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HOW TO USE
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1) Make a copy of this sheet to use it with your own values.
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2) Any number in blue with grey shaded background is an input (i.e. an assumption or data point that can be changed), anything in black is the result of a formula. Change blue at will, change anything in black with caution.
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3) All numbers in blue are market data and are illustrative only. Fill in your business metrics if you already know them or make your best assumptions.
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4) As with all templates, feel free to create your own model from scratch, using this as a guide.
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MetricsValuesDetails
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CAC37,84 €
the total overall cost to acquire a customer
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Conversion Rate1,85%
the percentage of website visitors who purchased something from your online store
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Improved conversion rate with free returns20%
how many percent will the conversation rate be improved by a free returns offer
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Return Rate20%
percentage of orders that are returned
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Increase in return rate20%
how many more returns are expected due to free returns
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Return costs: Transport5,67 €the cost of return shipment
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Return costs: Processing5,57 €
the cost of handling and processing returns
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Retention Rate (post return)12%
percentage of customers who buy again after a return
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Improved Retention Rate with free returns50%
how many percent will the retention rate be improved by free returns
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Average Order Value185,00 €
average order value before free returns
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Increase of Order Value9%
by what percentage does the average order value increase due to free returns
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Results
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Savings per customer
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through improved conversion rate6,31 €
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through improved retention rate0,73 €
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higher costs due to free returns (per order)1,58 €
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Total savings5,45 €
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Average Order Value
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without free returns185,00 €
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with free returns201,65 €
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Increase of AOV16,65 €
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