Names and aliases
refunded transaction share
Formula
completed_transactions_with_refund / completed_transactions × 100%
Metric card
| Unit | % |
|---|---|
| Data source | Transaction completion events, refund events, refund reason and initiator, a full-or-partial flag, and window boundaries. |
| Frequency | By completion cohort after the refund window closes. |
| Segments | micro-market, category, refund reason, initiator, fulfilment method, seller type, cohort |
Interpretation errors
- Attributing a refund to the month it was issued rather than the cohort of the original transaction, which severs cause from effect.
- Merging partial and full refunds into one figure without tracking refunded value separately.
- Treating a zero refund rate as ideal when it may mean refunds are effectively unobtainable.
Example
Illustrative example: 18 of 600 completed transactions are refunded, producing a 3% rate. The numbers describe no real platform.
Use
Attribute refunds to the cohort of the original transaction rather than the refund date, or changes in sales volume will distort the trend. Publish the count-based and value-based rates side by side. Maintain a reason tree separating supply quality, description error, fulfilment failure, buyer change of mind, and abuse, because the operational responses to these causes are mutually incompatible.
Anti-example
Tightening refund terms lowers the metric while redirecting dissatisfaction into cancellations, disputes, and buyer churn. Read without buyer repeat rate, that decline is easily mistaken for improved quality.
Limitations
- A refund can signal a quality problem or a functioning buyer protection; without a reason breakdown the direction of interpretation is undefined.
- The refund window is set by platform policy, so values are not comparable across platforms with different terms.
- Count-based and value-based rates tell different stories; a small group of expensive refunds is invisible in the count.
Related metrics
transaction-completion-rate, cancellation-rate, failed-transaction-rate, buyer-repeat-rate
Context sources
These works provide two-sided-market context; the formula above remains an author-defined working definition.
- Jean-Charles Rochet, Jean Tirole. Platform Competition in Two-Sided Markets (2003).
- Mark Armstrong. Competition in Two-Sided Markets (2006).