Return to Origin (RTO)

The True Cost of RTO

RTO doesn't just mean a lost sale. The real costs include:

Forward shipping cost

Return shipping cost

Packaging materials (often damaged)

Inventory handling and restocking

Potential product damage

Operational overhead

For many merchants, a single RTO can cost 2-3x the profit margin on that order.

Common Causes of RTO

Fake Orders (30-40%): Invalid contact information, no customer intent

Customer Changed Mind (20-25%): Buyer's remorse, found cheaper elsewhere

Customer Unavailable (15-20%): Multiple delivery attempts failed

Wrong Product/Size (10-15%): Expectation mismatch

Address Issues (5-10%): Incomplete or incorrect address

RTO Reduction Strategies

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Pre-Order

Phone verification

Address validation

COD fees to filter low-intent orders

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Post-Order

Order confirmation calls

Delivery date scheduling

WhatsApp/SMS reminders

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At Delivery

Partial payment options

Easy exchange policies

Delivery slot flexibility

Industry Benchmarks

| Industry | Average RTO | Good RTO | Excellent RTO | |----------|-------------|----------|---------------| | Fashion | 25-35% | 15-20% | <15% | | Electronics | 15-20% | 8-12% | <8% | | Beauty | 20-25% | 12-15% | <12% | | Food | 5-10% | 3-5% | <3% |