Return Label Costs: Understanding Pricing
Return Label Pricing Explained
Understanding return label costs is crucial for managing your business expenses. atoship extends the same discounted commercial rates to return labels, helping you save on both outbound and inbound shipping.
Key Benefits of atoship Return Label Pricing
- Same discounts as outbound — Up to 89% off retail rates
- Pay-on-use option — Only pay for labels actually scanned
- No hidden fees — Transparent pricing across all carriers
- Volume discounts — Better rates as you ship more
How Return Label Pricing Works
Return labels are priced the same as outbound shipping, based on:
| Factor | Impact |
|---|---|
| Package weight | Primary cost driver |
| Dimensions | Dimensional weight may apply |
| Distance (zones) | Zone-based pricing |
| Service level | Ground vs Express |
| Carrier | Each carrier has different rates |
atoship vs Retail Rates
| Carrier | Retail Rate | atoship Rate | Savings |
|---|---|---|---|
| USPS Ground Advantage | $8.50 | $4.50 | 47% |
| USPS Priority Mail | $15.00 | $8.25 | 45% |
| UPS Ground | $18.00 | $9.50 | 47% |
| FedEx Ground | $19.00 | $9.75 | 49% |
Example rates for 1 lb package, Zone 4. Actual rates vary.
Carrier Return Services Comparison
USPS Return Services
| Service | Transit | Best For | Starting Price |
|---|---|---|---|
| Ground Advantage Return | 2-5 days | Lightweight returns | $4.50 |
| Priority Mail Return | 1-3 days | Faster returns | $8.25 |
| Priority Mail Express Return | 1-2 days | Urgent returns | $25.00 |
USPS Advantages:
- Lowest rates for packages under 1 lb
- 63,000+ drop-off locations
- QR code and Pay-on-Use support
UPS Return Services
| Service | Transit | Best For | Starting Price |
|---|---|---|---|
| UPS Ground | 1-5 days | Standard returns | $9.50 |
| UPS 3 Day Select | 3 days | Faster returns | $15.00 |
| UPS 2nd Day Air | 2 days | Express returns | $25.00 |
UPS Advantages:
- Reliable tracking
- 5,000+ UPS Store locations
- Package pickup options
FedEx Return Services
| Service | Transit | Best For | Starting Price |
|---|---|---|---|
| FedEx Ground | 1-5 days | Standard returns | $9.75 |
| FedEx Home Delivery | 1-5 days | Residential returns | $10.50 |
| FedEx Express Saver | 3 days | Faster returns | $18.00 |
FedEx Advantages:
- Extensive retail network
- Saturday delivery options
- Strong commercial focus
Cost-Saving Strategies
1. Use USPS for Lightweight Returns
For packages under 1 lb, USPS Ground Advantage Return offers the best rates — often 50%+ cheaper than UPS/FedEx.
2. Enable Pay-on-Use Labels
Only pay for labels customers actually use:
- Perfect for apparel (30%+ return rates)
- Eliminates unused label costs
- Reduces billing reconciliation
3. Offer QR Code Returns
- Customers don't need printers
- Combined with pay-on-use for maximum savings
- Better customer experience
4. Right-Size Your Packaging
- Accurate dimensions avoid dimensional weight charges
- Provide customers with packaging guidelines
- Consider poly mailers for soft goods
5. Consolidate High-Volume Returns
For frequent returners or regional volumes:
- Batch multiple items into single shipments
- Use consolidation services
- Consider regional return centers
6. Leverage Regional Carriers
For returns within specific regions:
- OnTrac (West Coast)
- LSO (Texas/Southwest)
- Spee-Dee (Midwest)
Charging Customers for Returns
| Policy | Pros | Cons | Best For |
|---|---|---|---|
| Free returns | Best CX, higher conversion | Highest cost | Competitive markets |
| Flat rate ($5-7) | Predictable, shares cost | May deter purchases | Mid-market |
| Actual cost deducted | Lowest cost to business | Worst CX | Low-margin items |
| Free over threshold | Increases AOV | Complex to manage | Growing brands |
Industry Benchmarks
- Apparel: 67% offer free returns
- Electronics: 45% offer free returns
- Home goods: 52% offer free returns
Tracking Return Costs
In atoship Dashboard
Navigate to Reports → Returns Analytics to view:
- Total return shipping spend — Month over month
- Average cost per return — By carrier and service
- Return rate by product — Identify problem SKUs
- Unused label costs — If not using pay-on-use
Key Metrics to Track
Return Shipping Cost Rate = Total Return Shipping / Total Revenue
Industry Average: 1-3% of revenue
Cost per Return = Total Return Costs / Number of Returns
Target: Under $10 for standard ground