---
title: "Cancelled order: definition, formula and example"
description: "An order cancelled after it was placed. It is not a sale: no revenue, refund, cost or profit should count for it, whether or not money was refunded."
url: https://offersuite.io/glossary/cancelled-order
updated: 2026-10-13
---

# Cancelled order

An order cancelled after it was placed. It is not a sale: no revenue, refund, cost or profit should count for it, whether or not money was refunded.

## In plain words

A cancelled order was placed and then called off, by the customer or by the store, usually before it shipped. On Shopify a cancellation cannot be undone, and it may or may not come with a refund.

It should count as no sale at all. Counting it as a sale with a full refund books every cost of an order that never shipped, and the result is a loss that never happened. Counting it as a sale without a refund invents revenue.

## Formula

- A cancelled order contributes 0 revenue, 0 cost and 0 profit; it is counted apart as cancelled

## Worked example

If the $40.00 bag's order were cancelled and refunded but counted as a sale, it would show a loss of $22.64: every cost, no revenue. Counted correctly it contributes nothing and appears in the cancelled count.

### The example order

A $40.00 bag of coffee, shipped free, every cost counted

Revenue $40.00 to contribution margin $15.36 (38.4%)

Revenue

$40.00

Cost of goods

−$12.00

Pick and pack

−$1.18

Packaging

−$0.50

Shipping label

−$7.50

Card fee per order

−$0.30

Refunds

−$2.00

Card processing

−$1.16

Contribution margin

$15.36

2 declared kinds cost nothing on this option

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

## A cancellation is not a refund

A refund follows a sale that happened: the goods shipped and some or all of the money came back. A cancellation means the sale didn't happen. Shopify records a cancellation with a refund as a refund of every remaining line, which is why the two are easy to confuse in a report.

## Using it

Keep cancelled orders out of every margin and conversion figure, and count them separately. A rising cancellation rate on one offer is a signal of its own: it can mean the offer's price or promise is confusing, or that stock ran out for one option.

## In Offer Suite

Offer Suite treats an order that carries a cancellation as no sale in both cost views, and counts it separately as a cancelled order. That fix came from its own end-to-end tests.

Source: Offer Suite's money definitions, checked against real Shopify orders.

## Related

- [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary)
- [Calculator **Gift with purchase profit calculator** What a free gift costs per order, after its unit cost, its extra pick and its handling, and how much conversion it has to add to pay for itself.](https://offersuite.io/calculators/gift-with-purchase-profit)
- [Glossary **Refunded revenue: definition, formula and example** The part of an order's revenue given back, counted after discounts and before tax, and never taken off the order's cost, because the goods already shipped.](https://offersuite.io/glossary/refunded-revenue)
- [Glossary **Realized profit: definition, formula and example** The profit orders actually made: revenue net of refunds, minus the cost of every unit shipped, per offer and per option, first orders and renewals apart.](https://offersuite.io/glossary/realized-profit)