What a return actually costs a DTC brand

The two costs everyone counts

When an apparel shopper asks for their money back, the merchant pays to move and process an item that may not be worth the trip. Two costs show up on every statement:

The subscription figures are the entry tiers of the well-known returns portals at roughly 500 returns a month: Loop Returns’ Essential plan, ReturnGO’s base plan, or a usage-based floor like ReturnLogic’s. The label rate and the labor range are the ordinary domestic numbers the industry plans around; your own carrier contract and warehouse will move them. The point is the shape, not the decimal.

The two costs nobody counts

The return’s real price is paid while the parcel is in the air:

• The replacement, bought elsewhere. A shopper who wanted a size down does not wait two days for approval. The exchange you meant to keep is spent at whichever store answers first.
• The support thread. Between “return requested” and “refund issued” sits a queue of “where is my money?” messages — each one a human minute spent apologizing for a delay your process created.

Neither of these appears on the carrier invoice, which is why portals that automate the paperwork of a shipment can feel like a bargain while the leak continues underneath.

The break-even case for letting them keep it

For low-value items, reverse logistics costs more than the goods. That is the entire case for a “keep it, take store credit” resolution: skip the label, skip the bay, and hand back slightly more than the item’s worth in credit that comes back as revenue. Here is the arithmetic for one worked example — an $18.00 knit hat, which is typical of the items that sit under a $25.00 landed-cost threshold:

The honest caveat: this only holds under the threshold. A $180 coat should come back — its resale value more than pays for the label, and a credit-heavy policy on expensive goods is an invitation to wardrobing. The decision is per item and per shopper, which is exactly why a hand-set SKU rule “auto-refund anything under $25” leaves money on both sides: it keeps items it should have shipped back, and ships back items it could have kept.

What to do with the number

Take your own monthly return volume, your landed costs and your label rate and put them into the returns leak calculator. It estimates what keep-it resolutions would have saved last month — the freight-and-handling share of your returns spend that never buys anything. If the number is small, your returns are genuinely worth shipping back and a traditional portal is the right tool. If it is not small, the way Verifund resolves a return — keep it, swap the size, or ship it back, decided per item with the reasoning logged — is priced at a flat $149/month for up to 500 resolutions, with the volume stated up front.