How gross revenue resolves into net revenue after returns for your inputs — two deductions for returns and refunds, one add-back for any restocking fee recovered. Deductions reduce the top line; the restocking add-back partly offsets them. This adjusts revenue only; cost of goods, fees, and shipping still come off below to reach profit.
Line
Calculation
Amount
Gross revenue
before returns and refunds
100,000
Less: returns
100,000 × 8%
−8,000
Less: refunds
100,000 × 5%
−5,000
Add: restocking fees
8,000 returned × 0%
+0
Net revenue after returns
gross − returns − refunds + restocking
87,000
Net revenue retention
87,000 ÷ 100,000
87%
Estimates only — not financial, tax, or professional advice.
100% private — every number you enter is calculated in your browser and never sent to our servers.
What it calculates: Net Revenue After Returns, Total Returns & Refunds, Net Revenue Retention, Restocking Fees Recovered.
Updated 5 June 2026 · Transparent assumptions
Margins computed on gross revenue are wrong by the return rate
Gross revenue counts money that partly goes back out again. Every downstream figure built on it — gross margin, contribution, marketing efficiency — inherits the error, and in apparel that error can be a third of the number.
Net revenue after returns is the base that belongs in those calculations. It is also the figure that reconciles with the bank, which is usually how the discrepancy gets noticed in the first place.
One comes back as goods; the other is money back with nothing returned
A return sends the item back, so some value is recoverable through resale. A refund without a return — a goodwill credit, a partial refund for a damaged item kept, a price adjustment — recovers nothing at all.
Keeping them as separate inputs matters because they have different downstream costs. A business with a low return rate and a high no-return refund rate has a product or fulfilment problem it is paying to hide.
It offsets cost but is not free to charge
A restocking fee returns some of the handling cost on a returned item, and the calculator adds it back to net revenue. In categories where returns are expensive to process, it can be the difference between a viable and an unviable return policy.
The cost is in conversion and goodwill. Restocking fees are restricted or prohibited in some jurisdictions and for some reasons — a faulty item can never carry one — and a fee disclosed only at return time reliably produces a complaint rather than a payment.
This month’s returns belong to last month’s revenue
With a 30-day window, returns arriving in March are against February’s sales. Deducting them from March’s revenue understates a growing month and flatters a declining one.
For a stable business the distortion is small. For one growing or shrinking fast, match returns to the cohort that generated them, or the net revenue series will move for reasons that have nothing to do with the business.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
Results are estimates for planning and analysis based on the figures you enter. They are not accounting, tax, or financial advice — verify with your own records and a qualified professional before making decisions.
Published the calculator with its formula, worked example, assumptions, limitations and a bespoke guide, and added an automated formula test suite covering it.
Tested gross revenue less returns and refunds with any restocking fee added back, recomputed from the rates entered.
Tested that zero return and refund rates leave net revenue equal to gross, and that a restocking fee only ever raises the net figure.
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