The Importance of Using an Address Validator For Shipping

Editors Note: This blog was last updated March 2024.

There are approximately 165 million addresses in the United States, and everyday 509 million pieces of mail and packages are processed and delivered to those addresses by the USPS alone. To streamline delivery, it’s important to have an address validation process set so that you're always collecting a valid address from your customers. This allows you to be able to ship their item to the correct location.  
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The number one customer service question is where is my stuff, and the last thing you want to do is ship your merchandise to a nonexistent or wrong address. Besides unhappy customers, your warehouse will need to deal with the returned packages, and depending on which carrier you shipped with, you may incur additional costs for the returned goods. These are just some of the biggest reasons why address validation and verification are crucial for your business.

How Address Validation Can Affect Your Bottom Line

According to our data which encapsulates e-commerce shipping across dozens of product categories, approximately 2.1% of parcels incur address related issues. Non-validated addresses are 92% more likely to incur these issues. The consequences of these issues come in the form of shipping delays, lost packages, and address correction surcharges imposed by the carrier used.

The average cost for an address correction surcharge is $4.64 per package. When put at scale, if your business ships 15,000 packages a month and 1.5% of those packages incur an address correction surcharge, you'd be paying over a thousand dollars each month in fees alone.

The cost of losing an item will depend on the item's value, the shipping label cost, and the packaging costs. But the cost of losing a customer due to a poor post-purchase experience can be the most expensive. Returning customers spend 67% more on average than new customers but according to Modern Retail, 85% of online shoppers would not shop with a retailer again if they had an unsatisfactory shipping experience.

This all doesn't even include the fact that invalid addresses can slow down your fulfillment operations. Parcels can be sent back to your fulfillment center due to an invalid address which means more of your staff processing returns rather than packaging and shipping new orders.

When should you validate a shipping address?

Though Shippo validates addresses before a label is created, as a business, you should be verifying addresses before your customer checks out. This way, they can correct any mistakes before leaving the checkout flow, and you won’t have to pause your fulfillment flow to contact them. In order to achieve this, you can use products like Shippo's Addresses API which allows you to feature the address validation process upstream during your customer's checkout process.

If you take phone orders or have a customer support staff that can modify shipments, address validation should be performed any time the destination address is updated.

The USPS has a complete database of all addresses they deliver to. It is the most comprehensive set of residential and commercial address available in the United States. Many shipping platforms, including Shippo employ this address validation database to verify if the sender and recipient’s addresses are unique and deliverable before generating a shipping label.

What can I do to verify addresses?

The simplest and most automated way to validate an address at checkout is through an API. For instance, you can use Shippo to validate your address. We tap directly into USPS’ address database to verify all addresses so that you won’t end up with a non-deliverable shipping label.

Shippo’s Addresses API can validate addresses for over 50 countries and comes with a Confidence Score tool for suggested address changes. You can then accept or reject those suggestions based on the score. You can also use an address book so that you or your customers can save the verified address in your system for future use.

Another more manual method for one-off addresses verification is the USPS address lookup tool. You can type in the shipping address, and they can suggest similar, complete addresses.

What else can I learn from address validation?

Another important set of information that address verification returns is whether the address is residential (someone’s home) or a business. While USPS does not, certain carriers charge a higher price for delivery to a residence than a business. When getting rate quotes, you can use your knowledge of the destination type to pick the right carrier for the package and avoid surprise charges after you’ve shipped your packages.

Conclusion

Address validation is an often overlooked piece of shipping logistics, but it is very important for getting packages to your customers without delay. A little upfront investment and design can help mitigate a lot of headaches. With a simple and quick integration, you can use Shippo’s API to validate addresses during checkout and before generating a shipping label at scale.

Shippo is a multi-carrier API and web app that helps retailers, marketplaces and platforms connect to a global network of carriers. Businesses use Shippo to get real-time rates, print labels, automate international paperwork, track packages and facilitate returns. Shippo provides the tools to help businesses succeed through shipping.