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Stock / inventory · How to run this
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Where chargebacks and returns hit COGS

How to run thisStock / inventory4 steps
GuideChargeback / return vs COGS — claim map · Calculator lives in the articleOpen

Landed COGS is what it cost to make one unit shippable. A return or chargeback is what happens after a sale. Mixing them invents a unit cost that moves every time someone disputes. Build landed cost on landed COGS. Use this page to name where the post-sale dollar goes.

Pair: Chargeback / return vs COGS — claim map on Stock.

Returns

Restocked sellable. Unit comes back into on-hand. Reverse the COGS on that sale (or credit inventory). Not a fee line.

Damaged / unsellable. Inventory loss or write-down. Not a lower landed cost for the next unit you buy.

Keep-the-goods refund. No unit returns. Cash refund is a period hit. COGS for the shipped unit usually stays.

Chargebacks

Lost sale / CB debit. Settlement pull. Period expense (or contra-revenue) — not a change to factory or inbound on the next PO.

CB fee. Processor fee. Period expense. Do not paste it into landed COGS or max CAC as if it were freight.

What not to do

Do not average CB fees into unit COGS to “make contribution honest” — put fees in the waterfall / contribution path instead. Do not treat every Amazon return as restocked. Do not reuse a COGS that silently baked in last month’s disputes.

Related: Stock, landed COGS, Payments, Chargebacks.

Procedure

  1. Name return vs chargeback.
  2. If return: restocked sellable, damaged, or keep-the-goods.
  3. Put CB debit and fee on the period path — not unit landed cost.
  4. Rebuild landed COGS only from factory, inbound, duties, 3PL.

Failure modes

  • Stuffing CB fees into landed COGS.
  • Assuming every refund restocks.
  • Lowering next PO cost because of disputes.
  • Phantom on-hand after keep-the-goods.

Worked example

None on this page yet. When one lands it will be a real case: what broke, the number, and what changed. Not a composite.

Glossary

Restocked return
Unit comes back sellable into on-hand. COGS on that sale can reverse. Damaged and keep-the-goods do not restock.

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FAQ

Does a chargeback reduce my landed COGS?
No. The CB fee and lost sale are period hits. Landed COGS is what it cost to put a unit on the shelf.
Does a customer return change COGS?
If the unit is restocked sellable, inventory comes back and COGS for that sale reverses. Damaged or kept-by-customer does not.
Is this the landed-cost calculator?
No. [Landed COGS](/manuals/landed-cogs) builds factory + inbound + duties + 3PL. This page is where returns and CBs land after the sale.