Most owners treat refunds and remakes as random bad luck. They are not random. They are a cost center.
If you do not measure them weekly, they become a silent margin tax.
Quick Take
- Payment providers document dispute workflows and, in some cases, dispute fee differences by plan/region.
- Platform and payment deductions already pressure contribution; unmanaged refunds/remakes push it further.
- Community threads from small operators show repeated pain around chargebacks and “free meal” abuse.
- The solution is reason-coded tracking and policy-based response, not emotional one-off decisions.
Put All Losses in One Framework
Track three lines together:
- refunds (cash returned)
- remakes (cost incurred, no new revenue)
- chargebacks/disputes (revenue reversal plus handling burden)
Then use one weekly KPI:
Loss per 100 orders =
(refund dollars + remake cost + dispute losses)
/ total orders x 100Worked Example
Weekly numbers:
- orders: 1,200
- refunds: $620
- remakes (food + labor cost): $410
- chargeback/dispute losses: $270
Total loss = 620 + 410 + 270 = $1,300
Loss per 100 orders = 1,300 / 1,200 x 100 = $108.33That is the equivalent of a hidden discount on every 100 orders.
Reason Codes You Need
Use simple, operational codes:
- missing item
- quality issue
- wrong item
- delivery delay
- customer misuse/fraud suspicion
Do not start with 20 codes. Start with 5 that your team can use consistently.
Policy Moves That Reduce Losses
1) Set channel-specific remake rules
Not every claim needs a full refund. Use partial credit where appropriate and documented.
2) Tighten handoff controls
Most avoidable losses are handoff errors:
- missing modifiers
- unlabeled items
- incorrect bag contents
3) Track repeat claim patterns
If the same customer or location repeatedly triggers claims, escalate with a documented process.
4) Separate delivery delay from kitchen error
Without channel attribution, BOH gets blamed for logistics issues and you fix the wrong process.
Weekly 20-Minute Review
- Loss per 100 orders by channel
- Top 3 reason codes
- Top 5 items tied to losses
- Process fix assigned to one owner
- 7-day follow-up target
No owner, no fix. No reason code, no learning.
Related Guides
- US Restaurant Direct Order vs Third-Party Margin Playbook (2026)
- US Delivery Minimum Order Playbook (2026)
- US Weekly Recosting Workflow (2026)
- US Restaurant Cash Flow Forecast Playbook (2026)
KitchenCost helps you connect refund/remake losses back to item-level contribution so weekly process fixes are tied to real margin recovery.