Learn how wasted shipments could be a consequence of a bad address validation program

Due to incorrect shipping addresses, more than 4 billion pieces of mail are thrown away every year. That’s an enormous amount of waste! In that giant pile of mis-shipped goods and letters are the incorrect addresses of some very unhappy customers. And much of this waste, and customer aggravation, could have been prevented if shipment addresses had been validated correctly and at the right time.

Address Validation – What Does it Mean?

Address Validation is the process of validating that a shipping address exists and is in a standardized format. In the United States, companies verify through authoritative databases (Ex: USPS, FedEx, UPS) to confirm valid mailing addresses.

The purpose of Address Validation is to ensure that a shipping address is “valid”. If the address is incorrect or does not exist in the carrier databases, it is considered “invalid”. If invalid, the shipment will not be sent, or worse, it will be shipped but will not reach its true destination.

Why is Address Validation necessary?

Address Validation is more important and necessary than ever before! Why?

Reason One-Rising consumer expectations during the pandemic

The Pandemic forced the world to rely on e-commerce. It pushed consumers to expect their deliveries quickly and correctly. However, shipment costs have risen along with manufacturing costs and carrier surcharges; and keep in mind, most people are paying more for goods to be shipped to them, even if they have less money to spend. Consumers expect these high-cost and much-needed packages delivered to their homes and offices on time.

Reason Two-High costs and your bottom line

B2B and B2C companies require valid address data when processing shipments. If addresses are invalid, and shipments do not make it to their destinations, the overall cost of those shipments, including returns, delayed shipments, or canceled orders, can increase. Many carriers will add additional charges to shippers for mis-shipped parcels. These fines can be significant and erode profitability.

Reason Three-Customer Satisfaction

Quality address data is vital to customer satisfaction. Getting orders delivered to customers on time and maintaining a distinguished level of customer service are two prominent areas that lead to repeat business and growing revenues. [Learn more: How Shipping Software Cultivates a Positive Customer Experience]

The Risks of not using Address Validation

“The order will get there eventually. What’s the big deal?”

Several things could happen to your incorrectly addressed shipments during the ordering and shipping processes. They may be stopped during the fulfillment process –delayed until, or if, the correct address is identified. They could be redirected somewhere within the carrier delivery process – causing delays, cancellations, returns, or no shipment delivery at all. They might even be delivered to the wrong address where someone happily accepts a surprise package. Any of these scenarios cause one sure outcome: Disenchanted and frustrated customers.

With increased and sizable e-commerce competition, an unhappy customer can easily find another online company to order products from. Customers want to order from companies who care about them, and many want to order from companies who care about the environment. [Explore How Much Could a Bad Shipping Experience Really Cost You?]

Another sure outcome: Bad addresses lead to a waste of resources. Mis-shipments could lead not only to lost customers but hundreds of hours of wasted labor, wasted fuel, and increase your part in the big carbon footprint that is sitting on top of 4 billion wasted parcels each year.

How can you improve your Address Validation?

Last year we teamed up with Chris Lien, Executive Vice President of Postal Affairs at BCC Software, for a short but informative discussion  regarding Address Validation and the importance of quality data.

With 30 years in mailing technology, Chris Lein aptly advised companies to use what he refers to as the “3 C” approach when it comes to validating shipments: Complete, Correct, and Current. [Want to learn more about the 3 Cs? Listen in to ProShip ParcelCast Episode 15: How Address Quality Shines the Light on Dirty Data]

For instance:

  1. Complete – Is your shipment address complete? Did you make sure to include the street name or the apartment number?
  2. Correct – Does your zip code match the city and state? Did you verify that it was an Avenue and not a Street?
  3. Current – Are you positive there has not been a change of address for the consignee? Is the address a residential home or a commercial business?

Making solid and trustworthy technology investments up-front, like partnering with ProShip, will significantly help your company alleviate delivery and customer pains that come with bad quality address data. 

Tip: Don’t simply rely on carrier databases for correct addresses. And don’t trust that your old order intake and shipping processes are still working. Employing ProShip’s advanced technology to validate addresses and utilizing our experienced, consultative professionals can streamline your processes to get your shipments out faster and ensure accuracy.

How can you protect your Customer Experience (CX)?

Our Co-founder and Vice President of Sales & Marketing, Justin Cramer, has qualified advice for minimizing delivery delays and controlling carrier bill-back shipping costs from invalid addresses:

Embed address validation into your Enterprise Software Stack (ESS) to protect your CX.

When you make address validation an automated part of your order processes, it connects your existing ESS to the address validation API’s provided by ProShip or independent address validation service providers.

Validate addresses as close to the customer as possible. Make sure you have programs and processes in place to allow customer service teams to ensure correct data upstream.

Can you validate at the shipping point? Yes. Should you? No!

Here are Justin’s 3 points of advice on where to validate in your specific order intake process:

  • If you have an e-commerce website, you should be validating the destination address in the shopping cart.
  • If you are fulfilling orders that you receive via EDI, you should be validating addresses on EDI import.
  • If you are taking orders in a call center, you should be validating addresses as your call center personnel are entering them.

[Want to find out where to validate in your specific order intake process? Learn resourceful advice regarding address validation: Address Validation – Aim Close to the Customer]

How can you avoid wasted shipments?

While it’s impossible to operate at 100% efficiency, there are steps you can take and questions to answer that can get you closer to that benchmark.

  • Check your carrier invoices and calculate the number of charges you are receiving due to bill-backs. Could you make improvements?
  • Check your processes for validating customer addresses. Are they upstream or downstream? How is that affecting your shipments leaving the warehouse timely?
  • Check your customer feedback reports. Are there enhancements to be made for on-time delivery due to address correction issues?

In conclusion, the focus should be to make the changes you need to make now. Invest in technology that will refine your processes and increase your customer satisfaction. Not only will this increase your profits, but it will keep your parcels from ending up in that big pile of wasted shipments.

Author Bio

Jerri Dixon is Head of Strategic Partnerships at ProShip, with over 20 years in the supply chain and logistics space. Jerri has years of boots-on-the-ground experience during peak seasons with carriers and customers, including operations and technology consultations with Fortune 500 customers.

Ready to supercharge your shipping strategy?

ProShip works with a variety of partner technologies to offer best-in-class supply chain capabilities. Learn how ProShip multi-carrier shipping software integrates into your enterprise tech stack to make shipping your competitive edge by scheduling a discovery call with one of our shipping experts today.