Return Rate Calculation

mgoodman08

Starting to get Involved
#1
Hi Everyone,
Trying to come up with a % goal for in warranty returns. I've been using 2% as a monthly goal but we run large quantities. I think it made more sense when I worked at a manufacturer that did far less quantities a month. Currently we ship ~10,000-12,000 units a month. Over the last year we haven't reached a return rate over 0.15%.

Anyone have any thoughts.
 
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Jen Kirley

Quality and Auditing Expert
Staff member
Admin
#2
Hello mgoodman08,

While it seems like a good metric on its surface, what does it mean? How does this number convey "winning" or progress resulting from specific actions?

Another concern is what does not get returned for whatever reason. I won't likely make the effort to return an inexpensive item to the store; I will simply not buy that item or brand again. The manufacturer will not know there was a defect, or that being the reason they lost a customer.

An old study showed that 7 times as many people were inclined to complain than compliment, and 7 times were more likely to just buy elsewhere than complain. That makes this a very difficult metric to find a good use for.
 

Jim Wynne

Staff member
Admin
#3
Your thread title indicates that you're looking for a calculation or formula that will help with this. If that's the case, there isn't one. The goal for warranty returns (if you must have one) must take factors into consideration such as economic loss, and customer displeasure. You should study the reasons for returns, classify them, and decide if it's necessary to take action.
 
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