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Return rate

Return rate is the share of orders, or of their value, that customers send back or cancel after buying.

How it works

Google Ads counts a purchase when the order is placed, and a returned or cancelled order keeps its full revenue as conversion value. Only conversion adjustments from the store change that: a retraction removes the conversion, a restatement changes its value. So the account’s ROAS runs above the ROAS on revenue kept, and the gap grows with the return rate.

The rates by orders and by value differ when expensive items come back more often. For profit, the rate by value matters: it cuts the revenue you keep and raises your break-even ROAS. The full calculation is in return rate and break-even ROAS.

Formula

Returned or cancelled orders ÷ all orders (by value: returned revenue ÷ revenue)

Example

Example store, not client data.

Of the tableware shop’s 300 orders a month, 24 come back, worth 21,600. The return rate is 8% by orders and 12% by value. Google Ads still shows a ROAS of 4.5 (180,000 ÷ 40,000); on the 158,400 the shop kept, ROAS is 3.96. If returned goods go back on sale at full price, break-even ROAS on reported revenue rises from 1 ÷ 0.35 = 2.86 to 1 ÷ (0.35 × 0.88) = 3.25.

Not to be confused with

  • Return policy — the return terms a store sets, such as how many days a buyer has to send goods back. It is the rule, not the count.
  • Returning customer — a buyer who orders again. That return adds revenue instead of taking it away.

Right and wrong readings

  • Wrong: “The ROAS in Google Ads already accounts for returns.” Right: a returned order stays in conversion value until the store uploads an adjustment. In the example, the account shows 4.5, while the revenue kept gives 3.96.

Benchmarks

Benchmark according to the National Retail Federation and Happy Returns, 2025 Retail Returns Landscape (surveys of 358 ecommerce professionals at US retailers with over $500 million in revenue and of 2,006 consumers who had returned an online purchase in the past year, summer 2025): an estimated 19.3% of online sales would be returned in 2025, against 15.8% of all retail sales (NRF press release). Your niche may differ: these are large US retailers from a mix of categories.

Sources