Shipway, the logistics intelligence platform by Unicommerce eSolutions, has released the inaugural edition of its data-led e-commerce logistics report titled ShipNotes. The report offers deep insights into Return to Origin (RTO)—a major profitability roadblock for India’s growing D2C (direct-to-consumer) segment. Based on millions of shipments processed in FY25, the findings aim to help brands optimize their logistics strategies, reduce operational inefficiencies, and boost profitability.
Understanding RTO: E-commerce’s Hidden Cost Center
Return to Origin refers to orders that get dispatched but fail to reach the customer and are returned to the seller. These returns are often driven by delivery failures, incorrect addresses, customer refusal at the doorstep, or other logistical issues. RTOs not only inflate costs but also lock up inventory and hurt margins for D2C sellers.
Shipway’s FY25 data reveals a critical insight: Prepaid orders see less than 2% returns, while a significant 26% of Cash-on-Delivery (CoD) orders are returned. As CoD continues to dominate in tier-2 and tier-3 markets, ShipNotes focuses exclusively on RTO trends within the non-prepaid order segment.
City-Wise Trends: From Vadodara to Patna
The report uncovered stark city-wise contrasts:
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Lowest RTO rates: Vadodara (18%), followed by Thrissur, Mumbai, Kolkata, Chandigarh, Ahmedabad, Ernakulam, Nagpur, Chennai, and New Delhi.
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Highest RTO rates: Patna tops at 35%, followed by Srinagar, Jaipur, Varanasi, Ranchi, Jammu, Meerut, Guwahati, Vishakhapatnam, and Nasik.
This variance highlights the impact of regional behavior, delivery infrastructure, and address accuracy. Only cities with over 5,000 non-prepaid orders processed were considered in this analysis.
Faster Delivery = Fewer Returns
Delivery timelines significantly influence RTO rates:
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1–2 day delivery attempts see a 22% RTO rate
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3–5 day delivery attempts record 27%
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Deliveries attempted after 5 days spike to 35%
The correlation is clear: longer wait times lead to higher customer disengagement, making timely delivery crucial for reducing returns.
Order Value Also Influences Returns
ShipNotes found that:
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₹500–₹1,000 orders had the highest return rate at 28%
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Orders below ₹500 saw a 25% return rate
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Orders above ₹1,000 had a 24% return rate
This suggests mid-value purchases are most prone to buyer’s remorse or impulse-driven decisions, resulting in higher RTOs.
Zone-Based Complexity Affects Outcomes
Geographic delivery zones influence RTO rates:
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Intra-city (Zone 1): 20% RTO
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Intra-state (Zone 2): 23%
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Metro-to-metro (Zone 3): 22%
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Inter-state, non-metro (Zone 4): 27%
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Remote/Special zones (Zone 5 – NE, J&K): 28%
Longer distances, regional inaccessibility, and lower logistical predictability contribute to these disparities.
Tech-Driven Tools to Tackle RTOs
Shipway has been proactively addressing RTO challenges through a suite of intelligent solutions:
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Automated CoD confirmation systems to validate buyer intent before dispatch
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WhatsApp-based tools for real-time address correction and delivery rescheduling
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Manual verification support for high-value or sensitive orders
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“RTOs have long been an Achilles’ heel for D2C brands. Our data-driven approach for RTO reduction has created a blueprint for the industry. Anchored in intelligent automation and customer-centric verification systems, it has not only reduced operational costs for our partners but also enhanced the delivery experience for millions of customers across the country,”
said Saurabh Choudhary, Chief Business Officer, Shipway.
The company is also integrating AI-based risk scoring and smarter customer communication features to further help partner brands mitigate RTO impact and enhance consumer satisfaction.
ShipNotes FY25: Key Findings Recap
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CoD Drives Returns: <2% for prepaid vs. 26% for CoD orders
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Faster Deliveries Cut Returns: 22% RTO for 1–2 day delivery vs. 35% for 5+ days
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Top 5 Low RTO Cities: Vadodara, Thrissur, Mumbai, Kolkata, Chandigarh
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Top 5 High RTO Cities: Patna, Srinagar, Jaipur, Varanasi, Ranchi
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Mid-Value Orders (₹500–₹1,000): Highest RTO at 28%
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Zone-Based Complexity: RTOs increase with distance and delivery unpredictability
Conclusion
As India’s e-commerce continues to scale across urban and rural markets, RTO management is no longer optional but essential. Shipway’s insights, drawn from a national logistics footprint, provide valuable direction for brands to build operational resilience, enhance customer trust, and protect bottom lines.
