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RTO & COD Cost Calculator

See what returned (RTO) orders and cash-on-delivery fees cost you each month, and what cutting them would save.

Reviewed by CA Apurav GargUpdated Your numbers stay in your browser

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Calculator

Note:
Example values — replace with yours.

Your month

All orders shipped, before returns.

Share of orders paid cash on delivery.

COD orders that come back undelivered.

Usually much lower than COD.

What a customer pays per order.

Paid on every order dispatched.

Paid again when an order comes back.

Enter costs excluding GST if you claim ITC on them; including GST if you can’t.

Advanced options

Use “Custom rate” for rates like 3% or 0.25%.

Lost on every RTO.

Used for damaged returns.

Returned units you can’t resell.

Of order value.

COD fee is charged as

Charged by the courier for collecting cash.

e.g. a discount for paying online. Blank = none.

Your result

RTO and COD cost you, a month

₹41,550

₹50 per delivered order · 5.0% of delivered net revenue.

RTO orders a month
170 (COD 150 · prepaid 20)
RTO cost per delivered order
₹34
COD fees a month
₹13,500

What if…

Savings compare all four costs — RTO, COD fees, gateway fees and prepaid incentives — before and after. Cutting COD RTOs raises COD fees slightly (more COD orders get delivered); the saving shown is already net of that.

Cut the COD RTO rate

From 25% to 20%.

Save ₹4,050 a month (₹48,600 a year)

RTO orders
170 → 140
RTO cost
₹28,050 → ₹23,100
COD fees
₹13,500 → ₹14,400
Gateway fees + incentives
₹9,440 → ₹9,440

Move COD orders to prepaid

Moved orders take the prepaid RTO rate, gateway fee and incentive.

Save ₹4,785 a month (₹57,420 a year)

RTO orders
170 → 140
RTO cost
₹28,050 → ₹23,100
COD fees
₹13,500 → ₹10,125
Gateway fees + incentives
₹9,440 → ₹12,980

Monthly breakdown

Monthly breakdown
Item₹ or orders, per monthHow we got this
RTO orders a month170
of which COD150
of which prepaid20
Cost per RTO order₹165
RTO cost a month₹28,050
COD fees a month₹13,500
RTO and COD cost a month₹41,550
Payment-gateway fees on prepaid₹9,440
Prepaid incentives₹0
Delivered net revenue (excl. GST)₹8,30,000

Not included: sales lost to RTOs and the time your team spends on them. Tap ⓘ to see the working.

What this tells you

Returned orders and cash-on-delivery fees are easy to miss because they are spread across courier invoices and settlement reports. This calculator adds them up for a month and shows what they cost per delivered order and as a share of revenue.

The two what-ifs show what you would save by cutting COD returns or moving some customers to prepaid — after counting the extra COD fees, gateway fees and prepaid discounts those changes bring.

Assumptions used

  • Product GST rate choices: 0%, 5%, 18%, 40%, or a custom rate.
  • Every dispatched order pays forward shipping and packaging; every RTO also pays return shipping, and the damaged share of returned units is written off at product cost.
  • COD fees are charged on delivered COD orders only; gateway fees and prepaid incentives on all prepaid orders.
  • Lost sales and customer-service time are not included.
  • Moved orders in the second what-if take the prepaid RTO rate, gateway fee and incentive, and stop paying the COD fee.
  • Figures are rounded for display only; the working uses exact values.
Legal references and sources
Product GST rate choices
Rate rationalisation effective 22 September 2025 on the recommendations of the 56th GST Council meeting. Tools also offer "Custom" for special rates such as 3% or 0.25%.
Effective from 22 Sept 2025 · Awaiting CA verification · Official source

How this is calculated

  1. RTO orders = orders × COD share × COD RTO rate + orders × prepaid share × prepaid RTO rate.
  2. Cost per RTO = forward shipping + return shipping + packaging + damaged share × product cost.
  3. Monthly RTO cost = RTO orders × cost per RTO.
  4. COD fees = delivered COD orders × COD fee (in rupees, or the percentage of order value).
  5. Gateway fees = prepaid orders × gateway % × order value; incentives = prepaid orders × incentive.
  6. Delivered net revenue = delivered orders × order value ÷ (1 + product GST rate).
  7. Each what-if saving = (RTO cost + COD fees + gateway fees + incentives) now − the same total after the change.

Worked examples

Example 1: 1,000 orders a month, 60% cash on delivery

1,000 orders a month, 60% COD. 25% of COD orders and 5% of prepaid orders come back. Average order value ₹1,180 including 18% GST. Forward and return shipping ₹60 each, packaging ₹15, product cost ₹300, 10% of returned units damaged. COD fee ₹30 per delivered COD order, payment-gateway fee 2% on prepaid orders, no prepaid incentive.

RTO orders a month
170
RTO cost
₹28,050.00
COD fees
₹13,500.00
RTO and COD cost a month
₹41,550.00
Gateway fees
₹9,440.00
Prepaid incentives
₹0.00
Share of delivered net revenue
5.0%
Cut COD RTO by 5 points
saves ₹4,050.00 a month
Move 25% of COD to prepaid
saves ₹4,785.00 a month

Example 2: A smaller brand with a percentage COD fee and a prepaid discount

500 orders a month, 40% COD. 30% of COD orders and 4% of prepaid orders come back. Average order value ₹590 including 18% GST. Forward shipping ₹50, return shipping ₹45, packaging ₹10, product cost ₹180, no damaged returns. COD fee 2% of order value, gateway fee 2%, and a ₹20 discount for paying in advance.

RTO orders a month
72
RTO cost
₹7,560.00
COD fees
₹1,652.00
RTO and COD cost a month
₹9,212.00
Gateway fees
₹3,540.00
Prepaid incentives
₹6,000.00
Share of delivered net revenue
4.3%

Our MIS & Reporting service tracks RTO and COD cost from your courier and settlement data every month.

Questions sellers ask

What does an RTO order actually cost me?

You pay forward shipping, packaging and return shipping, and you may lose the product if it comes back damaged. You also miss the sale itself and spend team time on it — this calculator leaves those last two out, so the real cost is higher than the figure shown.

Why do COD orders come back more often than prepaid ones?

A customer who has not paid yet can simply refuse the parcel or not be reachable at delivery. Prepaid customers have already committed money, so they are far more likely to accept. That is why separate RTO rates for COD and prepaid matter here.

If I reduce COD RTOs, why do my COD fees go up?

Couriers charge the COD fee on delivered COD orders. When fewer COD orders come back, more are delivered, so you pay slightly more in COD fees. The saving shown in the first what-if is already net of that increase.

Is moving customers to prepaid always cheaper?

Not always. Prepaid orders carry a payment-gateway fee and any discount you offer for paying online. If your COD RTO rate is low or your prepaid discount is high, the saving can be small or negative — the second what-if shows the net effect for your numbers.

Where do I find my RTO rates?

Your courier or shipping aggregator dashboard usually reports RTO by payment mode. On marketplaces, the returns or RTO report shows the same. Use at least one full month so a few unusual days do not skew the rate.

Should shipping costs include GST?

Enter them excluding GST if you claim input tax credit on courier invoices, and including GST if you cannot — the GST is then part of the cost.

Want our team to check these numbers against your actual settlement reports?

We reconcile marketplace settlements, GST and TDS for D2C and marketplace sellers every month. Share your reports and we will walk you through what we find.

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Related

Disclaimer

Indicative estimate for general information only, based on the assumptions shown on this page. It is not professional advice. Rates on this page have not yet been verified by a CA.

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