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Calculate what bad address data is costing you

A bad address becomes a failed delivery, a flagged KYC check, or a mispriced quote, depending on what you do with it.
All of these cost your business. Knowing just how much is the first step to fixing it.

Your operation

Change anything that doesn't match your business. Every figure below is editable.
Bad addresses costing you at sign-up rather than at the door?
Use the onboarding model
UK domestic deliveries only
Industry default for online retail
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Adjust what a failure costs you

These lines build the cost of one failed delivery. Defaults come from published UK figures and sector estimates.
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Cost of bad address data
UK eCommerce · despatch · annual
What bad address data costs you each year
£2,000
£100 a month
Total cost of failed deliveries, all causes
£5,000
What one failed delivery costs
Carrier redelivery or return
£4.50
Address correction surcharge
£1.16
Handling, return and repack
£5.00
Customer support time
£2.40
Margin lost to refunds
£3.12
Cost per failure
£16.20
Address-related failures a year
105

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How this is worked out

Bad address data costs money in two different places depending on what you do. If you ship things, it costs you at the doorstep.
If you sign people up, it costs you in the form and in the compliance queue. The calculator runs whichever of the two applies, and you can switch between them.

If you ship things: the delivery model

failed deliveries   = parcels per month  ×  first-attempt failure rate
cost per failure    = carrier + surcharge + handling + support + goods
annual, all causes  = failed deliveries  ×  cost per failure  ×  12
cost of bad data    = annual, all causes  ×  share caused by address errors

If you sign people up: the onboarding model

applications lost   = reaching address step  ×  drop-off  ×  caused by address entry
lost value          = applications lost  ×  value of a completed application
reviews             = reaching address step  ×  sent to manual review
review cost         = reviews  ×  minutes  ÷  60  ×  hourly rate
lost in review      = reviews  ×  give up during review  ×  value
cost of bad data    = (lost value + review cost + lost in review)  ×  12
In the delivery model the headline is a share of a larger total, so both numbers are shown. In the onboarding model the attribution happens at the start, which is why the abandonment share sits in the assumptions panel and does most of the work. Change it and watch the total move; that is the number to argue about.
Assumption
Default
Status
Where it comes from
First-attempt failure rate, 
eCommerce
5%
Estimate
Mid-point of published UK retail ranges, roughly 3% to 8%. Replace with StoreFeeder despatch data.
First-attempt failure rate,
Logistics
8%
Needs sourcing
Widely repeated as the UK domestic rate. Trace to a primary source
before publishing.
Address correction surcharge
£7.70
Sourced
FedEx UK published address correction surcharge per shipment.
Failures attracting a surcharge
15%
Placeholder
Not published anywhere. Needs carrier invoice data.
Carrier redelivery, handling, support time
£4.50 · £5.00 · 8 min
Estimate
Mid-range of published UK cost models. Together they put cost per failure near £16, between the £11 retailer estimate and the £52 vendor figure.
Failures caused by address errors
35%
Needs sourcing
Quoted at 35% to 40% across the sector, usually without citation. Verify before launch.
Address-step abandonment
12% to 14%
Placeholder
No published UK benchmark exists for drop-off at the address
field specifically. Pull it from the client's own funnel analytics.
Abandonment caused by
address entry
30%
Placeholder
The single most load-bearing assumption in the onboarding
model, and the least evidenced. Deliberately conservative.
Manual review rate and drop-out
6% to 8% · 15% to 20%
Placeholder
Varies enormously by risk appetite and by how strict the bureau match is. Client data only.
Value of a completed application
£85 to £150
Placeholder
Opening defaults by sector. Nobody should leave this
one unchanged.

What this calculator deliberately leaves out

The £1.6bn annual figure quoted everywhere for UK failed deliveries comes from IMRG and NetDespatch's Valuing Home Delivery Review, published in 2018. It covers four failure scenarios and totals the cost across shoppers, retailers and carriers combined. It is neither address-attributable nor retailer-only, so it isn't used here.
Mispriced insurance policies are excluded. A wrong postcode can produce a wrong premium, which costs either margin or the sale, but the size of that effect depends on the rating model and can't be estimated generically.
Lost customer lifetime value is excluded. Around 70% of shoppers say they are unlikely to return after a failed delivery, which is real, but pricing it would rest the headline on the softest assumption available.
Refunds are costed at gross margin, not order value. A refunded order loses the margin and the goods, not the full revenue.
This is an estimate based on the figures you entered and the assumptions listed above. It isn't a quotation, a forecast, or a guarantee of savings. Address validation prevents address-related failures; it cannot prevent someone who gives you the wrong address on purpose.