Unreceived and Undeliverable Mail - Costs to Individuals and Businesses: UK
Research shows that undelivered or misdirected mail cost £4 million to all concerned individuals while businesses report a loss of £753,970,078 due to undelivered mail. On average, the cost for a single user is £16 while a business pays between £20 and £40.
- Revenue from letters: £4,152,000,000
- Number of parcels: £1,068,000,000
- Total Revenue: £5,220,000,000 [calculated]
- Number of letters: 14,378,000,000
- Number of parcels: 1,230,000, 000
- Total number of deliveries: 15,608,000,000 units [calculated]
- Average cost per letter: £0.29 [calculated]
- Average cost per parcel: £0.87 [calculated]
Cost to Individuals
We have assumed that a very large percentage of complaints to Royal Mail about unreceived packages are from individuals, as businesses do not usually report such things. As such, this response does not include letters and parcels where Royal Mail was not notified. All the calculations are presented in the attached spreadsheet.
- "The Royal Mail received more than 250,000 complaints about lost letters and parcels in the last financial year — and forked out more than £4 million in compensation, according to a new analysis."
- Total cost for individual complaints: £4 million
- Number of individual complaints: 250,000
- Average cost per complaint is £16 per delivery [400,000,000 / 250,000 = 16]
Cost to Businesses
- One source estimated that each undeliverable letter or parcel costs a business up to $25 in reprocessing, reprinting, new postage, and lost business.
- Another source calculated that, when a company factors in delayed and lost revenue, return mail transaction cost and the risk of non-compliance, the total cost of undelivered mail results in $50 per piece or between £20 and £40 per mailing.
- A study from the University of Westminister estimated that the total cost for businesses from returned mail in 2014 was £771 million. 
- According to our calculations, the cost to businesses from undelivered mail is £753,970,078 [see spreadsheet for the full details of the calculations]