This work identifies shortcomings in water footprinting and discusses whether the water footprint should be a volumetric or impact-oriented index. A key challenge is the current definition of water consumption according to which evaporated water is regarded as lost for the originating watershed per se. Continental evaporation recycling rates of up to 100% within short time and length scales show that this definition is not generally valid. Also, the inclusion of land use effects on the hydrological balance is questionable, as land transformation often leads to higher water availability due to locally increased runoff. Unless potentially negative consequences, such as flooding or waterlogging, and adverse effects on the global water cycle are considered, water credits from land transformation seem unjustified. Most impact assessment methods use ratios of annual withdrawal or consumption to renewability rates to denote local water scarcity. As these ratios are influenced by two metrics—withdrawal and availability—arid regions can be regarded as uncritical if only small fractions of the limited renewable supplies are used. Besides neglecting sensitivities to additional water uses, such indicators consider neither ground nor surface water stocks, which can buffer water shortages temporally. Authors favoring volumetric indicators claim that global freshwater appropriation is more important than local impacts, easier to determine, and less error prone than putting complex ecological interaction into mathematical models. As shown in an example, volumetric water footprints can be misleading without additional interpretation because numerically smaller footprints can cause higher impacts.