Understanding Return Rates
5 min read
A 30–40% return rate on COD orders is normal in Egypt. But "normal" doesn't mean it doesn't cost you. Every returned order erodes your margin. Here's how to understand, measure, and reduce your return rate.
What a return actually costs you
A returned COD order isn't just a lost sale. The actual cost: you paid the outbound delivery fee (35–50 EGP), the courier charges a return fee (20–35 EGP), the product may have been damaged in transit, you spent customer service time on the order, and you need to restock and relist the item. Total cost per return: 60–120 EGP, even if the product comes back in perfect condition.
Why Egyptian COD returns are high
COD removes financial commitment from the customer. Ordering is free — they pay nothing until delivery. So impulse orders get refused at the door. Common reasons: "changed my mind," size or color not as expected, duplicate order (ordered from multiple stores), financial situation changed by delivery day, or the customer simply wasn't home.
How to measure your return rate
Return rate = returned orders ÷ total shipped orders, in the same period. Track this per courier (different couriers have different return rates for different areas), per product category (apparel has higher returns than accessories), and per campaign (some ad audiences have higher return rates). Segment your data to find the problem.
How to reduce returns
The highest-impact tactics: (1) WhatsApp confirmation call before dispatch — confirms the order is real and reduces refusals. (2) Accurate product descriptions and sizing guides — most apparel returns are size-related. (3) Better product photography — set correct expectations. (4) Faster delivery — the longer the wait, the more likely the customer moves on. (5) Build a blocklist — repeat refusers cost more than they're worth.
Returns in your P&L
Returns reduce revenue (you don't keep the sale), increase COGS exposure (you now have inventory that was out and came back, possibly damaged), and add direct cost (return fees). Account for your historical return rate when calculating expected revenue from any batch: if you ship 100 orders at 400 EGP average, and expect 30% returns, your expected revenue is 70 × 400 = 28,000 EGP — not 40,000 EGP.
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