Refund rate is the share of revenue paid back to customers: refunds in a period divided by revenue in the same period, times 100.
Refund rate = Refunds paid ÷ Revenue × 100
On the sample data below, six months come to 4.66%.
Why it matters
Revenue that is refunded was never really earned. Tracking refunds as a share of sales shows whether growth is coming with more unhappy customers.
Worked example
The table shows the columns this metric needs from six months of a made-up subscription brand. Add each column up over the six months, then put the totals into the formula:
| Month | Revenue (net of discounts) | Refunds paid |
|---|---|---|
| 2026-01 | ₹4,12,000 | ₹18,500 |
| 2026-02 | ₹4,38,500 | ₹21,300 |
| 2026-03 | ₹4,71,200 | ₹19,800 |
| 2026-04 | ₹4,55,800 | ₹24,100 |
| 2026-05 | ₹5,02,300 | ₹22,600 |
| 2026-06 | ₹5,48,900 | ₹25,400 |
| Total | ₹28,28,700 | ₹1,31,700 |
₹1,31,700 ÷ ₹28,28,700 × 100 = 4.66%
Add up first, then divide. Averaging the six monthly figures gives a slightly different answer, because it counts a small month the same as a large one.
Month by month
| Month | Refund rate |
|---|---|
| 2026-01 | 4.49% |
| 2026-02 | 4.86% |
| 2026-03 | 4.20% |
| 2026-04 | 5.29% |
| 2026-05 | 4.50% |
| 2026-06 | 4.63% |
Refund rate calculator
How to read it
A rising refund rate after a product or supplier change is an early warning about quality. Look at refund reasons by product.
Common mistakes
- Refunds paid this month may be for orders from last month. Over long periods this evens out; month to month it does not.
- Partial refunds and store credit should be counted the same way each time.
- Chargebacks are refunds you did not choose. Track them separately because they also carry fees.
Calculate refund rate in Excel, SQL or Python
The quickest version, for the sample sheet laid out as in the CSV (headers in row 1, months in rows 2 to 7):
=SUM(E2:E7) / SUM(B2:B7)- Refund rate in Excel and Google Sheets — per-month formula and zero-safe version
- Refund rate in SQL — query by month and for the period
- Refund rate in Python (pandas) — pandas script with expected output
Related metrics
See all business metrics, or the statistics methods that sit behind them.
Questions people ask
- What is refund rate?
- Refund rate is the share of revenue paid back to customers: refunds in a period divided by revenue in the same period, times 100.
- How do you calculate refund rate?
- Refund rate = Refunds paid ÷ Revenue × 100. For example, with six months of sample data: ₹1,31,700 ÷ ₹28,28,700 × 100 = 4.66%.
- What is the refund rate formula in Excel?
- With the sample data laid out as in the downloadable CSV, =SUM(E2:E7) / SUM(B2:B7) gives the figure for the whole period (format the cell as a percentage). For one month, use =E2 / B2 and fill it down.
- What is a good refund rate?
- There is no figure that is right for every business: it depends on your products, prices and channels. A rising refund rate after a product or supplier change is an early warning about quality. Look at refund reasons by product.
Check how stable it is
A metric moves for ordinary reasons as well as real ones. These methods separate the two: the spread shows what a normal month looks like, the moving average smooths it, the z-score flags a month that is out of line and the trend line shows the direction.
Guides
About the data on this page
The figures come from a small made-up dataset, printed above in full so you can check every number by hand. Download it as monthly.csv. The results are computed from those rows when the page is built, and the Excel formulas, SQL and Python on these pages are run against the same rows before publishing, so the code and the answers agree.
To get these numbers from your own data without writing formulas, try AnalyzeIt: ask in plain words and it shows the working behind every figure.
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