The real cost of address errors in shipping—and how validation saves you

TLDR: The $24 per package shipping mistake you didn’t know you were making.

It’s easy to overlook, but a simple typo or missing apartment number in a shipping address can cost your business far more than you realize. In an era of rising carrier fees and tighter profit margins, bad addresses have become a silent budget-killer. Every time you ship to an incomplete or incorrect address, you risk incurring hefty surcharges, return fees, and lost sales. And those costs add up quickly.

How much does an address correction cost from UPS, FedEx, and USPS?

So what exactly are the costs when an address goes wrong? If you’re shipping via UPS or FedEx, the address correction surcharge (when the carrier has to fix or complete an address) is between $23.50 to $24 per package. 

There are also fees for returning undeliverable packages to the sender, and even surcharges for residential delivery if you mislabeled a home as a business address. 

Below is a snapshot of current fees:

Even when bad addresses don’t result in outright failure, they can still cause serious delays. In an internal Shippo analysis of address-affected shipments processed through our platform, we found that among the top three U.S. carriers, deliveries with address issues experienced delays of up to 7 days. That kind of lag—even if the package eventually arrives—creates a frustrating experience for customers and adds pressure on operations and support teams.

How often does this happen? 

According to Shippo’s data, about 2.1% of all e-commerce parcels have address issues. And in 2024 alone, among the top four address-related delivery failures tracked by Shippo—many of which did not use address validation—30% of shipments were marked undeliverable due to insufficient addresses (such as missing apartment or street numbers). Another 28% failed due to nonexistent addresses, and 26% couldn’t be delivered because the recipient was unknown. These issues alone account for hundreds of thousands of failed deliveries every year.

Fortunately, this is a mistake you can prevent before it ever happens.

How to validate addresses before shipping (and prevent expensive errors)

The best time to catch an address error is before you ship—ideally, before the customer even checks out. By validating addresses upfront, you can stop these fees at the source.

So, how do you validate addresses before shipping? The answer is to use a proactive, automated Address Validation API integrated into your e-commerce workflow.

Enter Shippo’s Address Validation API

Shippo’s Address Validation API is built to plug into your checkout form, your backend, or your address book—wherever you need it. It uses real-time access to domestic and international postal address databases, as well as several layers of checks, to validate addresses, ensuring your packages are deliverable before you create a label.

Key features include:

• Real-time validation with USPS-compliant formatting
• Suggestions and confidence scores when an address looks off to prevent wasted shipping spend
• Flags for residential vs. commercial so you don’t get hit with surprise surcharges
• Operates at scale with 99.9%+ uptime

You can enable validation with a single parameter (validate=true) or run batches through the API as needed. It’s designed to scale with your business, no matter how many addresses you process.

With a 48% reduction in address-related delivery issues, you’re looking at immediate savings and fewer angry customer emails.

Why it pays off

To put it in perspective, imagine you ship 15,000 orders a month. If 2.1% of those have bad addresses, that’s 315 problem shipments. At $24 each, you’re looking at $7,560 in extra fees every month. That’s $90,720 a year burned on completely avoidable mistakes. And that’s just the address correction surcharge. If a package gets sent back or lost due to a bad address, you eat the shipping cost (often paying to send it out and get it returned), you may have to replace the merchandise, and then you’ll have to spend staff time sorting out the mess. 

Perhaps most damaging is the hit to customer experience. The number one question in e-commerce fulfillment is “Where is my order?”, and a bad address guarantees it won’t be a happy answer. If a delivery fails, 85% of online shoppers won’t shop with you again after an unsatisfactory shipping experience. All the marketing spend in the world can’t easily win back a frustrated customer who never got their package. In short, bad addresses don’t just cost you money. They cost you reputation and repeat business.

Take charge of your shipping

In a world where every shipping dollar counts, you can’t afford to be making the $23 per-package-mistake on a regular basis. Shippo’s Address Validation API gives you the power to ensure every package has a deliverable destination before you send it out the door. No more surprise surcharges, no more blown budgets on return-to-sender shipments, and no more apologizing to customers for avoidable errors.

Ready to put a stop to bad-address blunders? Contact our shipping experts to see how you can integrate address validation into your ecommerce workflow with minimal hassle. The result: a smoother checkout, fewer fulfillment headaches, and immediate savings for your business.

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