Accenture found that just 17% of customers feel that modern businesses care about the post-purchase experience (e.g., everything after checkout).
That means most consumers feel abandoned when it matters most—the delivery experience. Whether it’s a lost package, a delivery delay, or an order that gets returned as undeliverable, an incorrect address can completely ruin an e-commerce brand’s reputation.
Address validation is a small detail with significant consequences for your business. Simply taking the time to validate addresses can reduce the risk of shipping errors, fraud, and chargebacks and increase customer retention.
When 73% of customers say they are unlikely to return after a bad delivery experience, it’s clear that address verification is necessary for business leaders seeking a competitive advantage.
The Role of Address Validation in eCommerce
Online shopping has become increasingly popular. Global e-commerce rose from 15% of total retail sales in 2019 to 22% of sales in 2022. Accordingly, the demand for efficient and accurate shipping and logistics has grown substantially.
However, the online checkout process adds a layer of complexity to each transaction.
Online shoppers are prone to mistakes as they quickly fill out the checkout form or rely on Google Autocomplete to share the shipping address correctly.
Typos and invalid ZIP codes, missing apartment or unit numbers, or the wrong street address can generate significant delivery delays if the e-commerce merchant doesn’t have a functional address validation process.
You could partner with the best logistics partner on the market and still have frustrated customers who have entered the wrong address—and never received their package.
Address validation makes it easy to avoid these errors altogether. The correct address validator prevents incorrect addresses, averting failed deliveries and lost packages.
Your customers can receive their packages on time as expected, fulfilling your brand promise.
Address Validation Benefits for Online Stores
There are immediate financial benefits to adding an address validation service to your e-commerce checkout process. Failed deliveries, chargebacks, and fraudulent orders can weigh down your bottom line.
Some studies have estimated the cost of an incorrect address at $35 to $70 per order. With costs like these, a tool like Address Validator — which uses a pricing model that charges only when an address is processed — practically pays for itself.
An e-commerce merchant can save thousands of dollars by adding this simple integration. See for yourself how much you could save with Address Validator’s Savings Calculator.
Checking the address information against an online database also helps your logistic partners.
Shipping partners that don’t have to waste time trying to deliver to an incorrect address, trying to decode a mistake on a shipping label, or dealing with an unhappy customer save money, too.
Likewise, each time a delivery is successful, your brand increases its chance of keeping a customer. Simply boosting customer retention rates by 5% can increase profits by 25% to 95%.
Imagine how much repeat business you could recover from the 73% of customers who are unlikely to return after a bad delivery experience!
How Address Validation Can Protect Your eCommerce Business
An address verification tool lets you confirm that the billing and shipping address provided by the customer is legitimate and matches their credit card information.
This not only reduces the cost of delivering to the wrong address, but it can also lower the risk of fraudulent chargebacks.
Address validation specifically protects your business from first-party fraud, fraud in which someone misrepresents their identity or provides false information for financial or material gain.
For example, a criminal could choose to ship to an address other than the billing address, and then claim the item was not received or initiates a refund without returning the item. First-party fraudsters cost businesses approximately $4 to $17 billion each year.
Address validation tools can help you identify and block orders from high-risk locations or addresses, reducing the chances of fraudulent activity.
Set up Address Validator with rules to prevent customers from inputting an international address, specific postal code, PO box, DHL Packstation, or parcel locker.
When someone adds postal addresses or other input that doesn’t match your rules or that may be mistyped, the tool will prompt an address correction or alert the customer that the address cannot be verified.
This process is fast and doesn’t detract from the customer experience. The validation prompts default to appear on the Thank You page post-checkout. With this configuration, the impact on the conversion rate is zero.
Suppose you decide to embed address validation during checkout. In that case, the impact on the conversion rate is empirically less than 1%, with the drop-offs mainly attributed to customers that specified invalid addresses — e.g., first-party fraudsters.
Optimizing Shipping and Logistics
Address validation APIs can streamline your shipping process while preventing delivery to an invalid address — and all the problems that can arise from entering the wrong address.
These apps eliminate the extra work, shipping costs, and unhappy clients that result from invalid addresses. Ultimately, address validation is a crucial part of optimizing the shipping and logistics of all businesses.
Today’s customers expect their online orders to arrive quickly, accurately, and in one piece. Address validation tools can verify addresses in real-time, catching errors or typos before the package is shipped.
For shipping partners like FedEx and USPS, accurate shipping labels speed up delivery times, ensuring the retailer and the customer are satisfied.
Likewise, by standardizing addresses, businesses can ensure that their shipping and logistics processes are consistent.
Warehouse partners and employees can avoid the time and effort (and costs) of reshipping the correct order to the valid address.
Instead, employees are freed up to spend time on high-value tasks instead of unpacking, repacking, addressing, and re-shipping a second order to the original customer.
[Read more: How to Prevent Shipping Errors with Address Validator]
Final Thoughts
As e-commerce continues to grow, shipping address validation will become exponentially more important.
An address validation app is a simple but powerful tool your online business can add to reduce fraudulent chargebacks, improve the customer experience, and save on operational costs.
There’s virtually no downside to offering address verification as part of the checkout experience. Data shows nearly zero impact on conversion rates, depending on when you add the address verification step.
And this tool helps ensure the best possible post-purchase experience. Customer satisfaction also increases with the higher likelihood of on-time delivery.
Lessening fraud is a great secondary benefit. Address Validator avoids surcharges from resolving undelivered products and the chargebacks often resulting from first-party fraud.
By spotting abbreviations that may be incorrect, Address Validator protects businesses from sending products to high-risk locations.
Fundamentally, Address Validator optimizes your shipping and logistics budget. When an incorrect address can cost up to $70 per order, a tool like Address Validator practically pays for itself.
E-commerce merchants can run more efficiently when employees don’t have to spend time unpacking, repacking, addressing, and re-shipping orders originating from incorrect addresses.
Learn more about Address Validator by signing up for a free trial.
