As a fashion eCommerce founder, growth is your focus, driving sales, expanding your reach, and building a brand customers love. But there’s one issue quietly chipping away at your profits: product returns.
Return rates in fashion eCommerce often range between 20% and 40%. And while they’re common, that doesn’t mean they’re harmless. Left unmanaged, returns damage your margins, distort your performance metrics, and create chaos in your cash flow.
At Team SAS, we specialise in supporting fast-growing UK-based fashion eCommerce brands with management reporting, outsourced finance, and virtual FD services.
One of the most common, and solvable, pain points we see? The hidden financial impact of returns.
Why Returns Hit Harder Than You Realise
High returns are often accepted as the cost of doing business online. But behind each refund is a stack of financial consequences many brands don’t track closely enough:
1. You’re Not Keeping All That Revenue
Gross sales might look great, but if 30% of orders are returned, your actual revenue is far lower. This distorts your marketing ROI, customer lifetime value, and overall performance if you’re not adjusting for returns in your reports.
2. Returns Cost Money
Reverse logistics isn’t free. Think return shipping, labour to inspect and restock, repackaging, and system time. These costs add up and often aren’t captured in your margins, or even fully measured.
3. Some Returns Can’t Be Resold
Items that come back worn, damaged, or out of season are often written off. That’s inventory you’ve already paid for, now sitting in a dead stockpile.
4. Cash Flow Gets Hit
When returns spike, cash disappears. Refunds flow out just as you’re paying for ads, suppliers, or fulfilment, leaving you in a tight spot, even during “successful” sales periods.
Why Founders Often Miss the Warning Signs
Returns usually show up in Shopify or your warehouse system, but often don’t get captured in the financial report. If your finance function is under-resourced or your systems don’t “talk” to each other, you’re likely flying blind.
The Fix: Accurate Management Reporting.
You don’t need to accept high return costs as inevitable. The key is visibility. Here’s how our team helps fashion founders take control:
1. Return-Adjusted Revenue Reporting
Shift the focus from gross sales to net revenue, after returns. This gives you a truer view of your actual income, helping you judge campaign performance, customer value, and growth.
2. Operational KPIs That Matter
We can prepare monthly reports with return rate %, and average return cost, so you can see where the damage is happening and fix it.
3. Actionable Insights
Better data leads to better decisions. High return rates on specific products? Improve sizing guides or product imagery. Refund spikes in certain countries? Adjust shipping or packaging policies.
Profitability Starts With Clarity
Returns may be part of the game in fashion eCommerce, but they don’t have to sink your margins. With accurate, timely financial reporting, you can track the impact, reduce the risk, and build a more profitable brand.
At Team SAS we help fashion founders get behind the numbers and act on them. Whether you need regular management packs, virtual FD support, or full financial outsourcing, we’re here to help you protect your margins, and scale with confidence.
Let’s talk. Book a free consultation with an Accountant and Trusted Business Adviser and find out how we can help you turn your returns problem into a profit opportunity. We are accountants offering a range of financial outsourcing services and virtual CFO services.
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