Unreceived and Undeliverable Mail - Costs to Individuals and Businesses: Global

Part
01
of two
Part
01

Unreceived and Undeliverable Mail - Breakdown of Business Cost Global

Although we were not able to find which industries globally experience the most monetary loss from lost mail, our team was able to find you a further breakdown of the costs regarding UAA mail.

COSTS TO BUSINESSES

BREAKDOWN OF COSTS OF UAA MAIL

RESEARCH STRATEGY

After an extensive search, our research team was unable to find an answer to the cost of unreceived mail to individuals, as well as the cost of undeliverable as addressed mail to businesses globally.

Our first research strategy was to conduct a search of databases provided by the Office of the Inspector General (OIG) and the United States Postal Service. We began our research on a general level by looking for the most direct, accurate answer to the request that will satisfy all parts of the research criteria. Here, we were able to locate the total amount of undeliverable as addressed mail in the United States and the cost occurred by the US post office and businesses in general. However, these sources did not provide information on the cost to individuals, as well as the global cost to businesses for unreceived and undeliverable mail.

As a second strategy our team researched specific industries. We first located a list of the largest industries in the United States and at a global level. Our team hypothesized that if we could find the amount lost by the largest industries, it would allow us to create you a list of the different industries globally that lose the most money from lost mail and allow us to find a total industry percentage for the United States. We searched for information in industry magazines/articles/websites related to mailing systems technology solutions, and industries specializing in solutions to problems like UAA and Mailing Systems Technology. Here, we found that trends that were responsible for the high amount of UAA mail in the United States. However, this strategy also did not yield information on the global aspect of the request or the cost to individuals.

Last, we attempted to find information on the percentage of outbound international mail, in order to triangulate a partial answer, or at least provide relevant information. We searched the International portion of the USPS and the Universal Postal Union's website. The United Postal Union "the primary forum for cooperation between postal sector players, thus our team felt if the information was available it would likely be published here. However, this data was neither found on official sites nor through general research. Here, we were able to locate information

Regarding the global component, we assume that the unavailability of this data may be because autonomous countries have varying levels of development and government services, which would render quantification and comparison across countries effectively meaningless. Regarding the cost to an individual, we suspect the unavailability of information is due to how difficult it would be to calculate the cost, given that it would depend on all sorts of factors, including how an individual responds, what the UAA item was, if it wanted, e.t.c.


Part
02
of two
Part
02

Unreceived and Undeliverable Mail - Breakdown of Cost Global

Detailed research reveals that undeliverable mails account for a colossal waste of money and also slows down revenue streams of companies. Undeliverable mails/parcels reduce productivity and are known to damage existing customer relationships. Due to insufficient global statistics, a triangulation attempt reveals that a total of 320,114 undeliverable mails due to outdated addresses were sent in April 2019 across the United at the cost of over $960,342.

MAIL LOSS STATISTICS FOR INDIVIDUALS AND BUSINESSES: REASONS

  • About 40% of the residents (individuals) of the United States who relocate do not update the relevant agencies with a forwarding address and this is responsible for many undeliverable mails.
  • According to the European E-commerce News web report of 2018, four out of every five retailers revealed that customers who mistype their (supply wrong) addresses are the most significant cause of failed parcel deliveries.
  • Failed delivery rate of business parcels mailed to customers in the United States is 4.7%.
  • The failed delivery rate of business parcels sent to customers in the United Kingdom is 5.6%.
  • Failed delivery rate of business parcels mailed to customers in Germany is 4.6%.
  • The average of failed deliveries in the United States, the United Kingdom and Germany is 5%.
  • Four out of every five retailers representing about 80% of retailers in the United States, United Kingdom and Germany revealed that customers often do not realize that most failed business mail (parcel) deliveries are due to wrongly typed addresses by consumers.
  • A 2017 report by Compu-Mail reveals that purchased lists of business enterprises have a margin of error often as high as 20-30% because people move, change jobs or get married/divorced.
  • The insurance or finance sector of the United States relies heavily on deadlines and operators within the industry are legally required to send "only to the last known address," not minding the most recent, even in situations where USPS already has an updated address and this accounts for several undeliverable as addressed (UAA) mails in the sector.
  • One of the reasons for undeliverable mails/parcels is that the mail database in some emerging economies, in several regions of the globe like LATAM, APAC and the MEA has low accuracy. This low accuracy of mail databases leads to the ineffectiveness of several direct mail campaigns of businesses organizations.
  • Businesses and individuals in the United States with a change of address accounted for 107,402 specific undeliverable as addressed mails out of a total of 600,592 UAA mails. While a total of 212,712 undeliverable as addressed mails were due to issues such as forwarding order challenges for moved residents. A total of 320,114 UAA were recorded in April 2019 across the United States due to outdated addresses for both individual mail and business mail.

LOSSES PER INDUSTRY

  • A recent survey within the e-commerce sector among 300 retailers and 2,000 online shoppers residing in Germany, the United Kingdom, and the United States revealed that 5% of all online orders mailed to customers do not make it successfully to the customer on the first attempt for no fault of the retailer.
  • While it seems that retailers are not collecting accurate customer address data, only 9% of consumers agree that consumers are supplying wrong addresses. However, four out of every five retailers (80%) revealed that customers often do not realize most failed business mail (parcel) deliveries are due to wrongly typed addresses by consumers.
  • The cost of failed order for the e-commerce industry for all studied regions according to the European E-commerce News web report is $17.55 per failed order on the average.
  • The cost of a failed order for the e-commerce industry for by country according to the European E-commerce News web report is $16.58 per failed order in the United States, $14.33 per failed order in the United Kingdom, and $14.87 per failed order in Germany.
  • In 2015, returned undelivered had a total cost of $1.5 billion for the United States credit card companies.
  • Although the operational cost of every undelivered mail piece is about $3, United States companies often spend as high as $50 per undeliverable item.
  • When indirect and direct expenses are monitored, the total cost for each undeliverable mail item for companies in the United States soars $50.8.
  • A 2016 report reveals that annually, mailers in the United States spend about $20 billion for undeliverable as addressed (UAA) mails, and the direct cost to the USPS is $789 million per year.

METHODOLOGY

We scoured through several surveys, postal agency reports and reports from agencies like USPS, among other online resources for precompiled reports on significant (major/primary) reasons that lead to total mail loss for both individuals and businesses globally. Unfortunately, there was no such global report available to the public as uncovered resources were behind payment walls. However, a 2019 "Global Direct Mail" report revealed that one major reason for undeliverable mails/parcels is that the mail database in some emerging economies, in several regions of the globe like LATAM, APAC and the MEA has low accuracy. There was no precompiled information on the percentage of mails that gets lost due to outdated addresses for both individual and business mails.

A review of trade journals, such as the E-commerce News of Europe revealed the results of a recent survey within the e-commerce sector among 300 retailers and 2,000 online shoppers residing in Germany, the United Kingdom, and the United States. The E-commerce News journal revealed that about 5% of all online orders mailed to customers do not make it successfully on the first attempt for no fault of the retailer. The report further disclosed that about four out of every five retailers (80%) revealed that most failed business mail (parcel) deliveries are due to "mistyped" addresses by consumers. A review of several trade journals did not give insight into the percentage of mail that ends up undelivered due to outdated addresses for both individual mail and business mail. There was again no insight uncovered from these trade journals on information on the percentage of mails/parcels that get lost due to outdated addresses for both individual and business mails.

Detailed research through databases like the American FactFinder, Cochrane, and Pitney Bowes database could not disclose the percentage of mail that's lost due to outdated addresses for both individual mail and business mail. Due to the scarcity of information on the topic, we looked at sources slightly older than the two-year usual credibility range. A 2016 Pitney Bowes credible blog/database report revealed that the business cost of "Undeliverable as Addressed Mail" in the United States is "$25 per piece of returned mail in ancillary costs."

We could not break this cost down into the percentage of mails that are lost due to outdated addresses for either individual or business mail because according to PostalPro, a mail/parcel is considered UAA if any of the following occurs:
(1) the individual, family, or business specified as the addressee has moved.
(2) the address is either incomplete, incorrect, or illegible.
(3) the addressee is either unknown or is deceased.
(4) the addressee has refused or failed to claim the mail.
(5) failure to pay the required postage.
Since the uncovered comprehensive resources did not break down yearly reports into the five definitions of UAA as given by PostalPro, we could not determine the percentage of yearly global mails that are lost due to outdated addresses for either individual or business mail.

An attempt to triangulate the percentage of global mails/posted business or private parcels that get lost due to outdated addresses proved abortive because of non-availability of data required to triangulate the solution. We researched for country-specific data regarding business or private mails that get lost due to outdated addresses, but there were no such reports uncovered. A 2019 UAA mail report by PostalPro revealed that in April 2019, both businesses and individuals in the United States with a change of address accounted for 107,402 specific undeliverable as addressed mails out of a total of 600,592 UAA mails. While a total of 212,712 undeliverable as addressed mails were due to forwarding order challenges for moved residents.
Unfortunately, the report did not contain a breakdown of the losses per industry.

CALCULATION

Total UAA mails in the United States for April 2019 due to address change = 107,402 + 212,712 = 320,114
Assuming that an undelivered piece of mail cost a minimum of $3 in the United States, 320,114*$3=$960,342
Thus, a minimum of $960,342 was used in sending undeliverable mails due to outdated addresses for the month April 2019 across the United States.

Sources
Sources

From Part 02
Quotes
  • "In general, purchased lists have a margin of error as high as 20-30% for various reasons (people move, change jobs, get married/divorced)"
Quotes
  • "When all of these indirect expenses are factored into the equation, the total cost for each piece of undeliverable mail soars to an estimated $50.8 "
Quotes
  • "That is $25 per mislaid memo. And in 2015, the amount of Undeliverable as Addressed mail (UAA) processed by USPS totaled a staggering 1.4 billion."
Quotes
  • "Annually, mailers spend about $20 billion in UAA mail, with direct costs to the USPS settling around $789 million per year."
  • "People move – it’s a simple reality of life that contributes frequently to returned mail. According to the USPS, up to 18 percent of the country’s population moves each year, and only about 60 percent of movers actually file a change of address record with the postal service."
Quotes
  • "The average shipping price of a parcel is $8.95 in the U.S., compared to $1.83 in China and $2.64 in Japan."
Quotes
  • "Average cost of failed delivery: €14.37 It found out that last year, the average cost of a failed delivery was over 14 euros. “UK businesses in particular suffer from this, with 5.6 percent of orders not arriving at their destination, and an average cost of failed delivery to the retailer of 16.4 euros.” In Germany, 4.6 percent of deliveries failed, with an average cost of 14.8 euros per failed order."
  • "In fact, four in every five retailers say that customers often don’t realize that failed deliveries are due to the fact that they mistyped their address."