Refunds on Swiggy and Zomato are deducted from your settlement before the money hits your bank. They rarely appear as a line item on the dashboard. Most owners model commission and packaging; refunds are the silent 2-4 point margin leak that also drags your ranking. Here is what refund rate actually costs and how to fix it.
What counts as a refund
- Wrong item / missing item — customer reports; platform refunds from your settlement.
- Quality complaint — cold food, spillage, portion size; often auto-refunded if customer rating is low.
- Late delivery (attributed to restaurant) — prep delay flagged by rider wait time.
- Order cancellation after acceptance — kitchen 86'd an item post-acceptance; counts against you.
The margin math
| Refund rate | Cost on ₹3L monthly GMV | Margin impact (on 16% contribution) |
|---|---|---|
| 1.5% | ₹4,500 | -0.3 points |
| 2.5% | ₹7,500 | -0.5 points |
| 3.5% | ₹10,500 | -0.7 points |
| 5.0% | ₹15,000 | -1.0 point |
On a ₹300 order at 16% contribution (₹48), a 3% refund rate costs ₹9 per order — nearly 20% of your contribution. At 200 orders/day, that's ₹54,000/month walking out the door.
How refunds affect ranking
Both platforms use operational quality signals — refund rate, cancellation rate, prep time, and customer rating — to rank outlets in search and recommendations. A refund rate above 3% typically triggers reduced visibility within 2-4 weeks. The outlet doesn't get delisted; it just stops appearing in the top carousel. Revenue drops 15-25% before the owner notices.
How to track refund rate weekly
- Export settlement CSV — Swiggy and Zomato both allow weekly settlement downloads. Filter for refund and adjustment lines.
- Divide by GMV — total refunds ÷ gross order value for the week. Track as a percentage, not rupees.
- Split by SKU — tag refunds to menu items. Any dish above 4% refund rate needs a fix, not more ads.
- Set a floor — target <2% refund rate. Above 3%, pause ads until ops are fixed.
Fixes that actually work
- Packaging for gravies — two-container setup with separator; cuts spillage refunds by 40-60%.
- Prep-time buffer — set aggregator prep time 3-5 minutes above actual. Late refunds drop sharply.
- 86 before accept — if an item is out, mark unavailable before the order lands. Post-acceptance cancellation counts as a refund.
- Portion standardisation — weigh top 5 SKUs weekly. 'Small portion' is the #1 quality complaint on biryani and thali.
Disputing refunds through the platform portal rarely works for quality complaints. Fix the root cause. Disputes are worth filing only for wrong-item claims where your packing photo proves correctness.
Model aggregator margin with refunds included →