A high ROAS can hide a problem: many sales are returned. If measurement counts revenue before returns, the real return is lower. Adjusting measurement to what actually stays sold changes decisions, especially in categories with a high return rate, such as fashion and footwear.
The essentials in a definition
Returns and real ROAS mean adjusting measurement to what actually stays sold: revenue net of returns and cancellations. Platforms count the sale at the moment of purchase, so it pays to correct with value adjustments, through conversion management, and to track measurement. The Consumer Rights Directive defines the right of withdrawal, which influences the return rate.
The problem with gross revenue
Platforms count the sale at the moment of purchase. If 25% of those sales are returned, the reported ROAS overstates the return by about a quarter. Campaigns with a good ROAS may yield small profit, or a loss, after returns.
Worse: products and audiences with more returns can look like the best.
Measuring the return rate
Calculate the rate by product, category, campaign and channel. Identify patterns: sizes, misleading descriptions, specific audiences, traffic source. Include the logistics and administrative cost of returns.
If you do not have data by campaign, start at product and category level.
From gross ROAS to net ROAS
- Calculate return rate by product and campaign
- Report net revenue and profit after ads
- Adjust values sent to the platforms
- Reduce returns at the source
Adjusting measurement
Report net revenue (after returns) and profit after ads. If possible, send platforms conversion adjustments to remove returned sales or use values that reflect the average rate. Use an adjustment factor by category when data arrives late.
Compare gross and net ROAS: the gap shows the problem.
A returned sale is not a sale, even if the platform counts it.
Reducing returns
Improve sizing, photos, descriptions and videos. Give information on measurements, materials and use. Ask for reviews with size details. Fix products with a high rate. Consider separating campaigns for high-return products, with stricter targets.
Review the returns policy: costs, deadlines and conditions influence behaviour.
Decision table
| Metric | Calculation | When to use |
|---|---|---|
| Gross ROAS | Revenue at purchase ÷ spend | Quick reference |
| Net ROAS | (Revenue − returns) ÷ spend | Budget decisions |
| Net margin | Net revenue − costs − spend | Real profitability |
| Return rate by category | Returns ÷ sales | Review products and promises |
Common mistakes to avoid
- Ignoring returns in the report. The best channels by gross ROAS may have more returns.
- Correcting only at month end. Optimisation learns from incomplete data.
- Not analysing the reason. High returns indicate flaws in the page, size or promise.
How to measure the result
Track returns by category, channel and campaign, and compare gross and net ROAS every month.
Limits and exceptions
Return adjustments depend on data quality and the ability to link returns to the originating ad, which is not always possible. Category estimates are approximations and may vary with seasons and promotions. Platforms have deadlines for accepting adjustments. Start with simple estimates and improve with real data, instead of waiting for perfection.
Illustrative example
Illustrative example: a fashion shop finds that a campaign with high gross ROAS has 40% returns. By adjusting the conversion value with a return estimate by category and fixing size tables, net ROAS comes to reflect reality. It reduces the campaign’s budget and improves product pages.
In practice: checkpoints
Subtract returns from revenue by order date, and use the return rate by category in your targets. Report the figure net of returns in the same dashboard where gross figures appear.
Frequently asked questions
How do I include returns in ROAS?
By reporting net revenue and, if possible, adjusting conversions or values.
Do returns affect every sector?
More in fashion, footwear and electronics. Check your own rate.
Should I penalise products with many returns?
You can set stricter targets while you improve the product and its information.
How do I adjust returns in platforms?
Through conversion value adjustments (retractions or reductions), according to each platform’s options.
What returns are normal?
It depends on the sector; compare with yourself over time and by category.
Measure return by what stays sold: adjust conversion value for returns and cancellations and track net ROAS and margin.
Sources and recommended reading
- Google Ads API: conversion management
- Google Ads Help: conversion measurement
- Consumer Rights Directive (2011/83/EU)
Last editorial review: October 2026. Informational content; always confirm current conditions in the official sources before deciding.