YourReturnRateIsYourRealCPA
Your Google Ads dashboard says your CPA is £30. Your agency celebrates. But 25% of those orders get returned. The ad spend doesn't come back. The fulfilment cost doesn't come back. The picking, packing, and return processing costs are real.
Your real CPA isn't £30. It's £40. And for some product categories, it's worse.
Fashion brands with 30-40% return rates are running Google Ads campaigns where the effective CPA is nearly double what gets reported. The agency never sees the returns data. Google certainly doesn't factor it in. Smart Bidding optimises for the conversion it sees, not the one that sticks.
The return-rate problem compounds in specific ways:
- Products with sizing complexity (fashion, footwear) have 2-3x the return rate of stable-fit categories
- Discount-driven traffic returns at higher rates than full-price traffic
- New customers return more than repeat customers
- Mobile-acquired customers return more than desktop-acquired customers
- Products sold through Performance Max often have higher return rates due to broader targeting
None of this appears in a standard agency report. The ROAS looks fine. The CPA looks fine. The P&L tells a different story.
We adjust every performance metric for returns before reporting. A kept-order CPA is the only CPA that means anything.
If your agency doesn't know your return rate by channel, by campaign, or by product category, they're optimising a fiction.