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Calculate Restocking Fee
Common Questions
Frequently Asked Questions
What is a restocking fee?
A restocking fee is a percentage of the purchase price a retailer withholds from the refund when a customer returns an item. It offsets the real cost of processing the return - inspection, testing, repackaging, and shelving - and discourages casual or wardrobing returns. The fee is deducted from the refund, so a $100 item with a 15% restocking fee refunds $85.
How do I calculate a restocking fee?
Multiply the item price by the fee percentage: restocking fee = item price x (fee % / 100). The customer refund is the item price minus the fee, minus any return shipping you deduct. For example, a $100 item with a 20% restocking fee produces a $20 fee and an $80 refund - or a $72 refund if an $8 return label is also deducted.
What is a typical restocking fee percentage?
Commonly cited restocking fees run from 10% to 25% of the purchase price, with 15% the rate you see most often in general retail policies. Categories where returns need testing or repackaging - electronics, appliances, furniture - tend toward the higher end. Whatever rate you choose, it should reflect your actual handling cost and be disclosed before purchase.
Are restocking fees legal?
In most places yes, provided the fee is clearly disclosed before the sale. Rules vary by jurisdiction: several US states restrict restocking fees - especially on defective items or where the fee was not conspicuously posted - and consumer law in the EU, UK, and Australia limits what can be deducted from refunds for faulty goods. Marketplaces also publish their own restocking rules. Check the law where you sell and put the fee in your return policy, not just your terms.
Should my store charge a restocking fee?
It is a trade-off. A fee recovers part of your return-handling cost and filters out low-intent returns, but it also adds friction at purchase and can hurt conversion in categories where free returns are the norm. A common middle path: no fee on defective items or store errors, a disclosed fee on opened or non-defective returns, and free returns kept for exchanges rather than refunds.
Does a restocking fee cover the full cost of a return?
Usually not. The full cost of a return includes unrecoverable ad spend, outbound and return shipping, payment processing fees the gateway keeps, inspection and repackaging labor, and margin lost on units that cannot be resold at full price. A 15-20% restocking fee typically offsets the handling portion only. Run your numbers through the refund true cost calculator to see the complete picture.
Do marketplaces like Amazon allow restocking fees?
Marketplaces set their own rules and they change, so check the current policy in your seller dashboard before relying on a fee. Amazon, for example, publishes guidelines that allow charging a restocking fee only in specific situations - such as items returned damaged or outside the return window - and prohibits it in others. Your own store's policy does not carry over to marketplace orders.
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