Gross average order value is gross revenue divided by gross orders: the average amount a customer was charged, VAT included, before any refunds. It is useful for judging basket size and shipping thresholds, and misleading for judging margins, because it contains money that was never the store's.
It is the version most dashboards show, and it moves for reasons that have nothing to do with the customer: a VAT rate change, a shift in the mix of markets, or a change in how much delivery is charged for will all move it without a single basket getting bigger.
Its net counterpart, computed after refunds and tax, is the one every margin calculation needs. The gap between the two is a store's own tax rate plus its return rate, and stores that quote the gross figure while computing costs against the net one produce cost percentages that look implausibly low.
Where gross AOV genuinely earns its keep is in decisions about the basket itself: free delivery thresholds, bundle pricing and the fixed costs of an order, all of which the customer experiences in gross terms.
