RTO (Return to Origin)
MetricRTO is an order that was shipped but never successfully delivered, and was returned to the seller — the revenue is reversed and the shipping cost is paid twice.
What is RTO, in plain English?
You send a parcel, the courier cannot hand it over — nobody home, the customer refuses it, or the phone number is wrong — and the parcel travels all the way back to your warehouse. You paid to ship it out, you pay to ship it back, and you earned nothing.
How do you calculate RTO?
RTO Rate = Orders Returned Undelivered ÷ Orders Shipped
RTO example
A brand ships 1,000 orders in a month; 220 come back undelivered. RTO rate = 220 ÷ 1,000 = 22%. At ₹120 of round-trip shipping per RTO, that is ₹26,400 of pure cost against revenue that never existed.
Common RTO mistakes
RTO is concentrated in cash-on-delivery orders, where the customer has committed no money and can refuse at the door at zero cost. Reporting ROAS at order time therefore overstates real returns by the RTO rate — a 3.0x order-time ROAS at 25% RTO is a 2.25x delivered ROAS, before the double shipping cost is even deducted.
What is a good RTO?
Lower is better, and the level varies by category, region and payment mix — cash-on-delivery orders typically drive most of it. Track RTO rate by payment method, pincode and campaign: a campaign whose orders return at twice the account average can look profitable at order time and lose money after delivery.
RTO FAQs
How does RTO affect ROAS?
Ad platforms report ROAS when the order is placed. If 25% of those orders return undelivered, a 3.0x order-time ROAS becomes 2.25x on delivered revenue, before counting the shipping paid in both directions. Measure ROAS on delivered orders.
How do you reduce RTO?
Common levers: confirm COD orders by call or WhatsApp before dispatch, offer prepaid incentives, exclude pincodes with persistently high RTO, validate addresses at checkout, and cut campaigns or placements whose orders return disproportionately.
What is the difference between RTO and a customer return?
A return happens after a successful delivery, when the customer sends the product back. RTO happens before delivery: the parcel never reaches the customer — refused, unreachable or undeliverable — and travels back to the seller.
Last reviewed October 3, 2026.