If your ecommerce business has ever lost a package, you aren’t alone.
According to The New York Times, one in ten packages go missing daily, and 1.7 million packages were either lost or stolen in the United States every day in 2019.
While it is impossible to completely avoid these events, thankfully, there are many steps you can take before, during, and after a package is shipped to prevent theft, misplacement, or damage.
So whether you’re a seasoned e-merchant or a total newbie looking to minimize the risk of lost packages, keep reading to enjoy the practical steps we lay out in this new guide.
How do lost packages affect your ecommerce business?
When packages disappear, it’s not just the physical items you lose.
Consider the additional costs incurred, such as storage costs before dispatch, the time and labor invested in order fulfillment, and, perhaps most importantly, the impact on your reputation with customers. So, in essence, misplaced parcels not only affect your profitability but also your capacity to attract and retain customers.
Now let’s uncover the main causes of lost ecommerce packages.
What causes lost packages?
There are three primary causes of lost packages: a problem with the shipping label, a problem with the packaging itself and porch pirates.
Specifically, if a shipping label is peeled off or the sender and receiver information on it is incorrect or blurred, last-mile delivery drivers will have trouble dropping it off at the right location.
Meanwhile, if a package is wrongly-sized, not weather-resistant, or lacking in dunnage, it becomes susceptible to damage. And then there are porch pirates who seize the opportunity to snatch unattended packages from doorsteps.
9 tips for minimizing the risk of lost packages
1. Use valid and secure shipping labels
Ensuring a package reaches its correct destination starts with using an accurate shipping label. At the most basic level, ensure every shipping label you generate includes:
- The destination and return addresses
- The weight of the package
- The package’s shipping class
- A valid tracking number with a corresponding and scannable barcode
- And other important details such as whether it’s FRAGILE or TEMPERATURE SENSITIVE.
Without this information, the parcel may not get to its recipient and, worse, if it is misdelivered it might not find its way back to the fulfillment center you sent it from.
Additionally, understand that every country has a standard layout for addresses.
For example, in the US, this USPS-dictated format includes the sender’s name and address, the recipient’s name, a street address, a city and state abbreviation, and a postal code at the minimum.
You are advised to follow this format to make it easier for last-mile delivery services to deliver accurately.
Moreover, USPS also recommends putting both the correct delivery and return addresses on a card or slip of paper inside the parcel, which can be helpful if the shipping box becomes damaged or the mailing label falls off.
2. Verify customer addresses
Wrong postal codes, missing suite numbers, typos, and the like can lead to your customer’s package arriving at the wrong location.
In response, USPS created the Coding Accuracy Support System to verify the accuracy of addresses and confirm they are using the right format. For US-based sellers, using CASS-certified software and shipping apps can reduce errors in customer addresses before labels are printed.
Thankfully, CASS is made available to all mailers, service bureaus and software developers so you can find a way to integrate it into your checkout or shipping process.
For those with operations outside the United States, there’s a plethora of shipping apps with advanced address verification tools that allow you to ensure a customer’s delivery address actually exists.
Lastly, as these tools help minimize the risk of lost packages, it’s best practice to contact the customer right before a label is printed just to ensure they approve the address.
3. Track orders in real-time
The importance of offering customers a way to track orders along every step of the delivery journey can’t be overstated.
Along with helping your store meet expectations by offering customers shipping transparency, this strategy goes a long way in preventing lost and stolen packages, and it helps you identify potential issues early so you can take action to resolve them.
To enable this, most 3PLs or shipping carriers will provide you a tracking number that you should use and pass onto customers in a post-purchase email.
But to take it a step further, consider using a shipping app that allows you to offer and customize a branded and self-service order tracking portal to your customers.
4. Invest in shipping insurance
Shipping insurance is a measure you can employ to protect your store and customers from financial loss. Usually, when a package goes missing, your business is forced to bear the cost.
However, if the package is insured, you can avoid the expense entirely by filing a claim with your insurer and having them reimburse the value of the package.
Shipping services like FedEx and UPS offer free insurance on packages valued $1-$99. From there, both carriers charge approximately $1 for every $100 of package value. In contrast, USPS charges varying insurance rates from $2.45 depending on the value of the package.
However, these aren’t the only shipping insurance providers, so you can look to third-party services for more competitive prices.
Whether or not to invest in shipping insurance will depend on the volume you ship and their value. So if you’re transporting dozens to hundreds of expensive products, shipping insurance will no doubt be worth it.
5. Spread inventory across multiple fulfillment centers
Another way to reduce the incidence of lost packages is to store inventory across multiple strategic locations.
By minimizing the transit zones parcels have to pass through, there’s less time for things to go wrong, so products can get to their buyers way faster, and the chances of theft and misplaced packages are greatly reduced.
Establishing warehouses across several locations fetches hefty costs, so you might want to partner with a 3PL that has several fully functional and state-of-the-art warehouses located across each coast.
6. Let customers schedule deliveries
While letting customers schedule deliveries won’t prevent packages from getting misplaced in transit, it can prevent them from being stolen.
Most cases of package theft occur after the package is delivered, so if the customer chooses a convenient delivery time when they’re home, porch thieves have lesser chances to steal it. However, know that this option is limited to local deliveries.
7. Choose the right packaging
Selecting the right packaging involves a lot of consideration. For instance, you have to ensure the package isn’t too big or small, you have to make sure it has its empty spaces filled out so the contents don’t jostle around and you have to ensure it is both water and damage-resistant.
That aside, you must consider your stance on the plain packaging vs custom packaging debate.
On one hand, discreet, brown packages with a label that doesn’t disclose the parcel contents will blend in with other generic packages and make porch pirates less tempted to steal it.
On the other hand, custom packaging can make a parcel easier for delivery services to track plus it makes the unboxing experience special for your customer.
If you have trouble deciding, don’t worry. With the right ecommerce packaging solution, your business can make the best of both worlds by concealing your branded packaging underneath a plain brown box.
8. Require a signature or in-person confirmation for certain products
If the contents you’re shipping are valuable enough, consider requiring a signature from an adult upon receipt of the package.
By doing so, you guarantee the product won’t be stolen after delivery, and you prevent fraudulent customers from lying that they never received their packages.
While this isn’t necessary for every ecommerce product, going these lengths for items parcels worth hundreds of dollars shields your business against the risk of lost packages, so it’s definitely worth considering.
9. Keep close communication with customers
As we said earlier, a lost package can cost your business more than money, it can also harm your brand reputation.
This is why close communication is vital throughout the purchase journey – especially during the period customers wait for their package. While minute-by-minute updates aren’t necessary, regular check-ins regarding the status of customer orders is essential.
So from the moment you fulfill the order, notify customers when their parcel is shipped, let them know when to expect delivery, and don’t keep them in the dark about potential delays.
If a package goes missing, be truthful with your customer and keep them updated about your efforts to track the package. If you must send a replacement, communicate the new development to them, provide a new tracking number, and let them know when to expect delivery.
Lost packages don’t have to be a regular occurrence for your business. By following the strategies we’ve discussed, you can significantly reduce the frequency at which your customers’ packages go missing, get damaged or get stolen.
But as much as we hate to admit, we can’t stop packages from going missing each and every time. So when a package does get lost, quickly notify your carrier and request they open a search for the package.
Since this hunt can take anywhere from days to months, you might want to send a replacement product to preserve your relationship with the customer.
If you’re lucky enough to find the package, simply return it to your warehouse. But if you don’t, you just have to swallow the loss and consider whether shipping insurance is right for you in order to minimize the losses on items that go missing in the future.