The question every returns P&L starts with
"What does a return actually cost us?" is usually answered with the shipping label. The label is the smallest honest part of it. This is the full stack, in the order the costs land.
The cost stack, component by component
| Component | What drives it | Industry-typical range* |
|---|---|---|
| Reverse freight | Carrier, distance, drop-off vs pickup, consolidation | $5–12 per parcel |
| Processing labor | Receiving, inspection, grading minutes per unit | $3–8 per unit |
| Software | Portal + routing engine fees | $0.50–2 per return (volume-tiered) |
| Refund overhead | Payment fees, CX contacts per return | $1–4 per return |
| Value erosion | The big one: markdown, resale discount, or liquidation haircut vs original margin | 20–70% of item value by disposition path |
*Ranges are industry-typical planning figures, not quotes. Your stack differs by category, AOV, and geography — that's the point of measuring it.
Why value erosion dominates
A $100 item that restocks at full price costs you the logistics only. The same item liquidated at 25 cents on the dollar costs the logistics plus $75 of vanished margin. Operators who manage only the logistics line are managing the smaller half of the problem. The disposition decision — restock, resale, refurb, liquidate, recycle — is where the money is.
The operator's takeaway
Build your per-return cost model with the five components separated, then attach a recovery rate to each disposition path. Two levers move the total: cutting logistics cost per unit, and shifting disposition mix toward higher-recovery paths. Every vendor pitch in this industry is a claim about one of those two levers — now you can price the claim.
Independent reverse-logistics industry analysis — not investment or procurement advice.