The Real Cost of a Return — What Retailers Actually Pay
A return comes back — and for many retailers, that's where the invoice ends. In reality, it's where the bill begins. Studies show: the actual cost of a return averages 20 to 60 percent of the original merchandise value. For premium electronics, it can be considerably more. Ignore this, and you bleed margin quietly.
Cost Driver 1: Return Shipping and Transport Logistics
Return shipping is the most visible cost — but rarely the most expensive. Depending on weight, volume, and carrier contract, retailers pay 3 to 15 euros per shipment for transport alone. Large appliances or international returns push these costs significantly higher. Retailers without a specialised returns logistics partner often pay list prices instead of volume rates.
Cost Driver 2: Goods Receipt and Initial Inspection
Every incoming return must be logged, identified, and given a first visual check. That requires staff, time, and processes. On average, this step alone costs 5 to 12 euros per unit — depending on product complexity. Electronics are particularly demanding: matching serial numbers, checking packaging, verifying completeness.
Cost Driver 3: Technical Functional Testing
Is the device truly faulty? Was it operated incorrectly? Has it been tampered with? A clean technical inspection isn't optional — it's the basis for both reuse decisions and any warranty claims against the manufacturer. Depending on product category, this costs 10 to 40 euros per device. Without a structured test process, mis-bookings and poor commercial decisions follow.
Cost Driver 4: Data Wiping and GDPR Compliance
For devices with data storage — smartphones, tablets, laptops, smart TVs, navigation systems — certified data wiping is legally required. A wipe to DIN 66399 or DoD standard costs between 5 and 20 euros per device, depending on scope and certification requirements. Skipping or failing to document this step risks GDPR fines that dwarf any return-side profit.
Cost Driver 5: Refurbishment and Recovery
Can the goods be sold again? Often yes — but not without effort. Minor scratches, missing accessories, damaged packaging: each must be assessed, refurbished, or replaced. Refurbishment costs range from 15 to 80 euros per unit depending on condition. Without a clean A/B/C grading, you either give away upside or undersell.
Cost Driver 6: Restocking or Disposal
At the end of the chain comes the decision: shelf, outlet, spare parts, or disposal. Storage costs for unprocessed returns add up fast — 2 to 8 euros per month per unit is realistic without a clear process. Disposal costs are on top of that whenever devices can no longer be recovered.
The Total: What a Return Really Costs
| Cost block | Cost per unit (indicative) |
|---|---|
| Return shipping | 3 – 15 € |
| Goods receipt & visual check | 5 – 12 € |
| Technical functional testing | 10 – 40 € |
| Data wiping (certified) | 5 – 20 € |
| Refurbishment | 15 – 80 € |
| Storage / disposition | 2 – 8 € / month |
| Total | 40 – 175 € per return |
For a device with a retail price of 200 euros, that means up to 87 percent of the merchandise value can vanish into the returns process alone — when no efficient workflow is in place.
What Retailers Can Do
The first step is transparency: you can't reduce return costs you don't measure. The second step is specialisation. A professional returns service provider brings volume rates, structured test processes, certified data wiping, and recovery channels — turning a cost factor into a controllable, often profitable process.
PST — Professional Support Technologies manages the entire returns process for retailers and manufacturers in the electronics industry — from intake through technical inspection to certified data wiping and recovery. Learn more