What you really earn on an order is the price excluding VAT minus everything that order costs: purchase price, shipping, packaging, payment costs and a share of the returns. That amount is often much lower than the difference between selling price and purchase price.
You cannot simply pass some of those costs on to the customer. The law sets what you may charge for payment and what you refund on a return. So include those costs in your price.
In short
- Calculate per 100 orders shipped: what is left after VAT, purchase price, shipping, packaging, payment costs and returns? Divide that by the number of orders the customer keeps.
- A surcharge for ordinary consumer payment cards and for SEPA payments is not allowed. For other payment methods a surcharge may be no more than the actual cost.
- On a return you refund the standard delivery costs. The cost of sending it back is for the customer, but only if you said so in advance.
In this article
- What is left of the price the customer pays?
- Do you charge VAT on the shipping costs the customer pays?
- May you pass payment costs on to the customer?
- Who pays the costs of a return?
- Does free shipping cost you more than you think?
- Which costs per order are easy to forget?
- How do you keep track of the margin per order?
What is left of the price the customer pays?
Less than the difference between selling price and purchase price. First take the VAT off the price, because it is not yours. Then subtract the purchase price, and the costs you incur per order: shipping label, box and packing material, payment costs and any commission from a platform.
Then come the returns. A returned order brings in no revenue, but you have still paid for the outbound shipping, the packaging and the payment costs. It often also takes time to check the item, and sometimes you can no longer sell it at full price.
So calculate per 100 orders shipped. Then you count the costs of all shipments, including the orders that come back. What is left, you divide by the number of orders the customer keeps.
In this example you seem at first sight to earn € 28 per order: € 50 excluding VAT minus € 22 purchase price. After shipping, packaging, payment costs and returns, € 16.50 per order shipped is left, or € 19.41 per order the customer keeps. With your own figures it may come out higher or lower.
Do you charge VAT on the shipping costs the customer pays?
Yes. VAT is charged on the total amount, and that includes shipping, delivery and packaging costs (Belastingdienst, calculating VAT on goods). If you charge € 4.95 for shipping, it contains € 0.86 VAT at 21%. So you keep € 4.09 to pay for the label.
The delivery costs get the same rate as the goods. If one order contains goods at 9% and at 21%, you split the VAT on the delivery costs in proportion to the amounts of those goods (Belastingdienst, examples of combinations of goods and services). So an online shop with books and toys in one parcel does not charge a flat 21% on the shipping.
May you pass payment costs on to the customer?
Not for the most commonly used payment methods. You may not charge a fee for consumer payment cards whose fees fall under the European card payments regulation, nor for payments that fall under the European SEPA regulation, such as credit transfers and direct debits in euros (Dutch Civil Code, article 7:520(4)).
For other payment methods a surcharge is allowed, but it may never be higher than what that payment method costs you (Dutch Civil Code, article 6:230k(1)). So a surcharge is not a way to earn extra.
In practice you therefore bear your payment service provider's costs yourself. Include them per order in your price. Ask your payment service provider whether you get the costs back when you refund an order. If you do not, they are also part of the cost of a return.
Who pays the costs of a return?
You refund the customer everything they paid, including the delivery costs, within 14 days after the customer cancelled the purchase (Dutch Civil Code, article 6:230r(1)). If the customer chose a more expensive delivery method than your cheapest standard delivery, you do not have to refund the extra cost (article 6:230r(3)).
You may wait to refund until you have the item back, or until the customer shows it has been sent back (Dutch Civil Code, article 6:230r(4)). The cost of sending it back is for the customer, unless you failed to tell the customer this (article 6:230s(2)). So state it clearly in your information in advance, otherwise you also pay for the return shipment.
If the customer used the item more than was needed to assess it, you may charge for the loss in value (Dutch Civil Code, article 6:230s(3)). You get the VAT on a reversed sale back through your return (Turnover Tax Act 1968, article 29).
Does free shipping cost you more than you think?
It can. Researchers followed purchases at an online retailer and also ran an experiment. When shipping was free, customers more often bought products with a higher chance of being returned. As a result, the share of returns went up. In a simulation for that retailer, free shipping brought more sales but less profit, because of the extra returns and the lost shipping revenue (Shehu, Papies & Neslin, 2020).
That applies to that one retailer and does not mean that free shipping loses you money. It does show that you should not judge free shipping on sales alone. Look at the number of returns before and after such a promotion, and work out what is left per 100 orders.
A minimum order value for free shipping is a middle way. If you want to know which amount fits, calculate with your own cost per shipment and your own return figures.
Which costs per order are easy to forget?
Costs that do not appear on an invoice per order. You see a shipping label and the purchase price straight away. Other costs come through a monthly invoice or through your own time, and so drop out of view. Think of these items:
- Time for picking, packing and handling returns, also if you do it yourself. Use a reasonable hourly rate for your own hours.
- Discount codes and promotions. VAT is charged on the amount the customer actually pays, so a discount also lowers your sales excluding VAT.
- Advertising you use to bring in orders. Divide the monthly cost by the number of orders in that month.
- Subscriptions for your shop system, shipping software and storage. They are fixed per month, but weigh more per order when you sell little.
Include these items in the calculation per 100 orders. Then you see not only what an order brings in, but also how many orders per month you need to cover your fixed costs.
How do you keep track of the margin per order?
By recording a few figures every month. You do not need a complicated system. With this information you can repeat the calculation above every month:
- The number of orders shipped and the number of returns.
- Sales excluding VAT and the purchase value of what the customer keeps.
- The costs of shipping labels, packaging and payment costs, each on its own cost account.
- What you write down on returned items you cannot sell at full price.
If you sell through more channels, such as your own online shop and a platform, do the calculation per channel. A platform has different costs, and the return rate can differ per channel. That way you see which channel and which product group really pays.
Sources
- Belastingdienst, Calculating VAT on goods, accessed 28 October 2026. belastingdienst.nl
- Belastingdienst, Examples of combinations of goods and services, accessed 28 October 2026. belastingdienst.nl
- Dutch Civil Code Book 6, articles 6:230k, 6:230r and 6:230s, in force on 28 October 2026. wetten.overheid.nl
- Dutch Civil Code Book 7, article 7:520, in force on 28 October 2026. wetten.overheid.nl
- Turnover Tax Act 1968 (Wet op de omzetbelasting 1968), article 29, in force on 28 October 2026. wetten.overheid.nl
- Shehu, E., Papies, D. & Neslin, S.A. (2020). Free Shipping Promotions and Product Returns. Journal of Marketing Research, 57(4), 640-658. doi.org