The Cost of Mail Not Making It To Its Final Destination

Shippo Snippets:

• If a carrier is unable to deliver to a person’s address, they can scan the item as “No Access”
• Mail that’s Undelivered as Addressed (UAA) can have costly implications for businesses
• In 2018, 14.4 million pieces of mail sent by the IRS were returned as undeliverable, costing the agency an estimated $43 million

The Story:
All too trained in the ways of fast and free, today’s online shoppers can be a tough bunch—especially, when it comes to getting their orders on time. And if their last-mile delivery flounders in any way, they can be quick to tell the world about their experience, or even shift to another competitor.  

Sometimes, the issues that delay or disrupt mail delivery are unforeseen. But other times, they can even be customer-induced. In this article, we’ll take a look at the cost of missed deliveries, why customers can sometimes make guaranteed delivery a challenge, and how to help stop shipments from getting sidetracked to ensure delivery.

When And Why Customers Don’t Receive Deliveries

Sometimes, the customer can’t sign for a shipment, and it can be for a variety of reasons besides simply not being home:

No Access to Delivery Location

If a carrier is unable to deliver to a person’s address, they can scan the item as “No Access.” Depending on which day the delivery was attempted (i.e. Saturday), it might mean reattempting on the following business day. But other issues, like the address being in a gated community, the receptacle being blocked, or interference from an animal (yes, USPS lists this as a valid reason for failed delivery—which makes the whole treat carrying thing seem infinitely more understandable) can stand in the way of a successful delivery attempt.

Undeliverable As Addressed or Wrong Address

When mail is undeliverable as addressed, it’s either forwarded to an address on file, returned to the sender, or treated as “dead mail” and sent to the USPS Mail Recovery Center. Sometimes, customers make a mistake inputting their address or get confused in the checkout process. The result is retailers shipping their items to a wrong address or place they no longer live. They might have forgotten to forward their mail or the forwarding period expired.

Unexpected Shipping Delays

The customer could be not-so-patiently waiting at home for their package, but unforeseen circumstances like traffic delays, weather conditions, or crises like the global disruptions from the Covid-19 pandemic could lead to unavoidable delays. For those expecting guaranteed delivery, this is understandably, extra frustrating.

Attempted – Not Known

This means a delivery attempt was made but the package was put back into the mail stream because the recipient’s name didn’t match the one living at the location. In these cases, the delivery address exists, there’s access to the location, but when the carrier arrives with the package, the recipient is “not known” at the place of address.

Redelivery Attempts Are Made

Sometimes, when the above scenarios occur, redelivery attempts can be made by the carrier and could come with some costly redelivery fees. With USPS, a PS Form 3849 is left in lieu of the package, which tells the recipient the type of mailpiece attempted, why it was not left, and which redelivery options are available. These can include scheduling a redelivery or picking up the package at a local post office.

With some major carriers, the cost of redelivery can add up (we’ll get into that shortly).

What Can Missed Deliveries Cost a Business?

Regardless of the reason a recipient didn’t receive their shipment, online retailers are usually still on the hook for extra charges or replacement orders when it happens. That’s in addition to the cost of maintaining a stellar seller reputation.

Mail that’s Undelivered as Addressed (UAA) can have costly implications for businesses, and even government entities. Even the U.S. Treasury found in 2018, that 14.4 million pieces of mail sent by the IRS were returned as undeliverable, costing the agency an estimated $43 million. That’s a lot of money wasted on some bad addresses.

The expensive toll that UAA can take on an independent business can come in many forms:

Brand Perception

There are costs to managing customer relationships. And failed deliveries are a key part of the equation. If a customer feels your company can’t deliver on its package delivery, they might move on to a retailer who can. Especially if the return or refund process is a headache. At the end of the day, it could come down to weighing the cost of replacing an item against the damage to your business’s brand perception.

Lost Revenue

Missed deliveries can cut into an independent business’s bottom line in many ways. In fact, the average cost a retailer incurs from failed delivery is $17.78. Not to mention the costs associated with stolen or lost packages (some of which are falsely reported).

On top of the expenses incurred from shipping replacement orders, e-commerce stores can see chargeback fees as high as $100 per transaction for returns. False “Item Not Received” (INR) claims can cost online retailers dearly, and can take a swipe at their reputation when word gets out that they’ll easily cave and replace or refund an order.

A Heavier Carbon Footprint

Redeliveries have hefty environmental costs as well. As of 2019, Greenhouse gas (GHG) emissions from transportation made up 29% of total GHG emissions in the U.S. Since 71% of consumers are concerned with a business’s commitment to the environment, trying to minimize the need for unnecessary transportation and deliveries could help you contribute to conservation and foster a more eco-friendly brand.  

Other Fees

Redelivery fees, which we mentioned above, can sometimes stack up and might vary between carriers:

• USPS Package Intercept, allows a sender to stop or redirect a delivery, and charges a fee of $14.65, plus any related postage
• With UPS, a Delivery Change Request can be made after a missed delivery attempt. The customer can opt to hold the shipment for pickup or future delivery, have it delivered to another address, or returned to the shipper (unless they live in Puerto Rico). They will be charged a redelivery fee unless they opt for Will Call or Return to Sender. In the case of Return to Sender, the shipper would need to use the similarly named UPS Delivery Intercept, which can cost $17.00 – $23.90 per package
• For non-Freight FedEx services, the cost of address correction to redirect the delivery is $17 per package
• DHL Express also charges $17 per shipment for address correction and redelivery

How to Help Prevent Shipments From Getting Sidetracked

Here are a few ways independent businesses can improve first attempt delivery rates:

A Clear Checkout Process

About 61% of consumers would forgo their shopping cart if they ran into address input issues. Making sure your checkout process asks all the right info is a great way to get quality data and avoid address input complications. Clear, concise forms and responsive, easy-to-use interfaces (across devices) can increase the likelihood of addresses being entered accurately and customers completing their purchases.

Address Verification

An advanced address verification tool can help prevent failed deliveries, address correction surcharges and validate addresses through API before a shipping label is even created (Hint: Shippo can help with this).

Global Address Formats

For independent businesses with an international reach, ensuring address verification systems support global address formats and can search for addresses in different languages and character sets is another key component to avoiding sidetracked shipments.

Consistent Tracking Info

With the right tracking tool, growing merchants can track shipments across all carriers with normalized data and full tracking history. This offers transparency for both sellers and customers and can get ahead of failed deliveries by providing real-time updates instead of inaccurate system-generated scans.  

Overall, the less complex the shipping experience is for the customer, the less likely it is they’ll enter the wrong address information, or even abandon their cart altogether. Shippo simplifies the shipping process and can save you significant time and money in the process.

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