COD and RTO Cost Calculator for Online Sellers
See what COD and returned parcels cost you each month, and the largest prepaid discount you can give.
- Free to use
- Runs in your browser
- No sign-up
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How it works
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Enter a month of your own numbers from your shop, courier or seller account reports. Press Try an example to see a sample.
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Add your shipping, return and packaging costs per parcel, your COD fee and your payment gateway fee.
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Compare COD and prepaid orders, read the money lost to RTO and the prepaid discount limit, then copy the summary or download the CSV.
About the COD and RTO Cost Calculator
Enter your own numbers: orders a month, average order value, product cost, the share of orders paid by cash on delivery (COD), your COD fee, how many COD and prepaid orders come back as RTO (return to origin: parcels the buyer refuses or that cannot be delivered), shipping both ways, packaging and the share of returned goods you cannot sell again. You get the profit and margin on a COD order and a prepaid order, what it costs to get one order delivered, the money RTO costs you each month, and the largest discount you can give for paying online before a prepaid order earns less than a COD order. It runs in your browser: nothing is uploaded.
How the maths works
Every order is sent once. An RTO parcel comes back: you pay shipping both ways and the packaging, and lose the stock you cannot sell again; the rest goes back on the shelf. A delivered COD order pays your COD fee, and every prepaid order pays the gateway fee on its value. Profit here is before ads and overheads. The cost to deliver one order is shipping, packaging, fees and RTO losses divided by the orders that reach the buyer. All of it is our maths on your numbers.
The largest prepaid discount
If prepaid orders come back less often than COD orders in your numbers, each prepaid order earns more. The tool finds the discount at which a prepaid order earns the same as a COD order: the difference in profit, divided by the share of prepaid orders delivered (after taking out GST, if your prices include it) minus the gateway fee rate. Below that discount, a buyer who would have ordered anyway and pays online instead of COD leaves you better off (our measure).
What this tool cannot do
It does not know your courier rates, RTO rates or marketplace fees, and it does not sign in to your seller account or courier panel: every figure is yours. It counts RTO parcels, not returns after delivery, and leaves out ads and marketplace fees; the True ROAS Calculator covers ad costs and returns. The ways to cut RTO are our suggestions, not promised results.
Frequently asked questions
What is RTO in e-commerce?
RTO means return to origin: a parcel that goes back to the seller without being delivered, for example because the buyer refused it, could not be reached or gave a wrong address. You pay to send it, and depending on your courier or marketplace to bring it back, and the sale does not happen. The tool counts both shipping legs, the packaging and the stock you cannot sell again.
How does the tool compare COD and prepaid orders?
It works out the profit on an average order of each kind with your own RTO rates: COD orders pay the COD fee when delivered, prepaid orders pay the gateway fee, and each kind carries what its RTO parcels cost. The difference shows what a COD order costs you compared with a prepaid one, per order and per month.
How is the largest prepaid discount worked out?
Discount = (profit on a prepaid order − profit on a COD order) ÷ (share of prepaid orders delivered − gateway fee rate). If your prices include GST, the delivered share is first divided by 1 plus the GST rate, because the discount comes off the price with GST. It assumes the buyer would have ordered anyway; a discount meant to win new buyers needs a different sum.
How can I reduce RTO on COD orders?
Our suggestions: confirm COD orders on WhatsApp or by phone before you send them, check the address and PIN code at checkout, ask for a small part of the price online on COD orders, give a prepaid discount below the limit this tool shows, and send tracking updates so the buyer expects the parcel. The what-ifs in the result show what a lower RTO rate is worth in your numbers.
Should I enter order values with or without GST?
Either. If your order value includes GST, tick the box and enter the GST rate on your products: the GST you collect is not your income, so the tool takes it out before working out profit. Fees given as a percentage are worked out on the order value you enter. Check your GST rate with your CA; this is not tax advice.
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- SKU Profit Analyzer Find the SKUs that lose money after fees, returns, ads and shipping, with the price or fix for each one.
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Related reading
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