RTO (Return to Origin)
RTOAn e-commerce shipment outcome in which an order shipped to the customer is undelivered and returned to the seller's warehouse — typically due to refused delivery, customer not available, or address issues.
Return to Origin (RTO) describes a shipment that goes out but never reaches the customer in a delivered, accepted state — and is sent back to the seller. It is distinct from a customer-initiated return after delivery (which is generally just called a 'return'). RTO rates on Indian e-commerce range widely by category but are typically 10–25 percent for COD apparel and meaningfully lower for prepaid orders.
RTO is expensive: the seller pays forward shipping (often subsidised but not always), reverse shipping, COD handling fees, and incurs marketing-spend cost-of-acquisition with zero revenue. Some marketplaces also retain a portion of the original commission on RTO orders despite no sale being completed.
Reconciliation patterns for RTO: matching reverse-leg shipping deductions on the settlement report to corresponding outbound orders, verifying that commission was reversed (not always automatic), confirming that COD handling fees were not charged on RTO orders that never collected cash, and ageing RTO inventory to detect items lost in reverse logistics.