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A return costs more than the refund.

Refund, inbound shipping, inspection, unsellable remainder, and lost contribution on the original sale all sit on the same event.

Fully loaded return cost$110.40
Unsellable remainder$11.40

Formula

return_cost = refund + inbound_ship + inspect + (1 − resell_rate) × cogs + original_contribution_lost

Example

An $89 refund with $7 inbound, $3 inspect, 40% unsellable on $28.50 COGS is already over $100 before lost ads.

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