Back to GlossaryE-commerce
What is RTO?
Return to Origin — when a delivery fails and package returns to the seller.
Detailed Explanation
RTO (Return to Origin) occurs when a delivery attempt fails and the shipment is returned to the seller's warehouse. India has one of the highest RTO rates globally — 25-40% for COD orders and 5-10% for prepaid orders. High RTO rates directly impact profitability through: double shipping costs, packaging damage, re-processing labor, and potential inventory loss. Strategies to reduce RTO include: increasing prepaid order percentage, address verification via OTP, COD-to-prepaid conversion offers, IVR confirmation calls, and pincode-level RTO analytics to identify high-risk zones.