The statement, line by line · P&L line 15
Net orders
Orders that survived their refunds.
Formula
Gross orders - fully refunded orders, on the refund date
Net orders is gross orders minus the orders that were fully refunded, counted on the day the refund was issued. It is the honest denominator for net average order value, and the gap between it and gross orders is a direct read on how much of a period's activity did not survive contact with the customer.
The refund day, rather than the order day, is what makes the figure stable. A fully refunded order still happened: it was picked, packed and shipped, and those costs stay in the period it was placed in. Removing the order from the period it was placed in as well would quietly rewrite a closed month.
Partial refunds are deliberately not counted here. An order refunded in part is still an order; its money movement belongs in returns, where the amount is what matters, rather than in a count where it would have to be either whole or nothing.
Watching the two counts together is the useful habit. A widening gap means either a product problem or an expectation problem, and it is visible weeks before it shows up in a margin.