Shipping and returns that do not eat your margin

Shipping policy is usually copied from a competitor and then quietly destroys the margin. It is worth twenty minutes of arithmetic.

Work out the real cost per order

Not just postage. Packaging, the labour to pack, the average return rate, and the cost of processing a return. For a small physical-goods shop this is frequently €6–12 per order even when postage alone is €4.

Free shipping is a discount

If you offer it, you are reducing your margin by that amount. Two ways to make it work: build it into the price, or set a threshold high enough to be worth it. A threshold around 1.3–1.5× your average order value is the usual sweet spot — high enough to lift baskets, low enough to feel reachable.

The right of withdrawal changes the maths

EU consumers have fourteen days to withdraw from a distance sale, without giving a reason. You must refund the purchase price and the standard outbound shipping. You may require the customer to bear the return cost — but only if you told them so clearly beforehand. Get that wording right and returns cost you far less.

Reduce returns before you optimise them

Most returns in clothing and homeware are sizing and expectation problems. A size chart with real measurements, a photo showing scale, a written description of the material, and honest colour. Every return you prevent is worth more than every return you process efficiently.

Set delivery expectations precisely

"Ships in 2–3 business days" is a promise you can keep. "Fast delivery" is not. Under-promise and the support inbox stays quiet; over-promise and every delayed order becomes an email.

Multiple options beat one clever one

A cheap slow option, a standard option and an express option lets the customer choose their own trade-off — and a surprising share pick express when it exists. Removing choice to simplify the checkout usually removes revenue as well.