Undeliverable Mail: The Costs and Effects on Your Business

How Clean Data Can Improve Mail Deliverability and Cash Flow!

Ever wondered how many mail pieces get returned to your business?

According to the USPS, businesses spend more than $20 billion annually on mail that can't be delivered. What does this translate to for your business? Well $20 billion annually isn’t just the cost of materials and postage. It’s also the value of what's inside the envelope. Depending on what mail you send—invoices, marketing mail, or notices—an undelivered mail piece can really cost your business delayed cash flow, lost marketing opportunities, and customer dissatisfaction.

You can reduce the financial burden of undelivered mail with online tools and workflows. We’ve outlined below five key steps to take control of data quality. Get ready to eliminate that dreaded yellow sticker and help your business get on track to getting paid faster.

Step 1: Assess your data and use address correction software with CASS & NCOA databases.

Let’s start with a typical input/output example. Think about your customer data workflow, specifically how and where customer address data is entered. Knowing more about the process will help determine where the risks or opportunities for errors exist. Next, are you using any databases or technology to ensure your customer data is complete, compliant, and correct? Many companies struggle with governance issues related to their customer data. It’s important to know there’s a mail workflow that can correct the information.

We encourage companies to use address correction software that includes the two USPS databases designed to ensure that addresses are complete and current. This way, you’re not spending money on mail that can't reach its destination.

Here are the two important mail address databases:

CASS (Coding Accuracy Support System) – corrects city and street name misspellings, street suffixes and zip codes.
Businesses that use a CASS system can become CASS certified when they confirm and correct ZIP+4 codes and carrier route information against USPS addresses and city/state fields. 

NCOA (National Change of Address) – a database of about 160 million permanent changes of address in the past 48 months. With millions of Americans changing their addresses each year, it is essential to regularly update your data from NCOA. NCOA is the primary pre-mailing move update tool, and it easily compares name and address records in a mailing list against the National Change of Address database.

These databases will save you potentially thousands on undeliverable mail, and also on postage costs. Businesses that use a CASS system along with pre-sorting, can take advantage of postage discounts, when they confirm and correct city, state and ZIP+4 codes as well as sort mail down to the carrier route information. 

Step 2: Meet the Industry Standard of No More Than 6-10 Percent of Mailing Costs Resulting from UAA 

If you had to guess, what percent of your mail is UAA, or Undeliverable As Addressed? With over 40 million Americans changing their addresses every year, that number can be uncertain. Undeliverable mail is money spent and that figure gets expensive when accounting for how much it costs to re-process the undelivered mail, which includes valuable resource time to research the correct address and prepare a new mailing, the additional mailing materials, and another round of postage costs.

Industry standards state that UAA should only account for 6-10 percent of your total mail costs. This should be a calculation based on what your business does annually to evaluate your data quality and how much it may be costing your business as a whole. While UAA mail isn't 100% avoidable because not everyone registers their address change with the USPS, many people do. Address correction software can reduce your business's cost significantly and clarify the uncertainty.

Step 3: Consider USPS Address Change and Address Element Correction Services

Two additional services are offered to CASS-certified mailers to cut down on undeliverable mail. These services help alert mailers when they have an undeliverable address and promptly fix the issue, instead of waiting weeks to find out if your mail was delivered or not. 

ACS (Address Change Service) – allows mailers to receive notifications that their mail was undelivered electronically. Businesses don’t have to wait weeks and then deal with piles of pesky yellow-stickered mail in their office. With address correction alerts in electronic format, businesses can easily update their database without waiting for undelivered mail to return and dealing with the associated manual processes.

AEC (Address Element Correction) – fixes inaccurate addresses that aren't fixable with CASS Certified address-matching. If an address is missing an element, CASS Certified address-matching software might lack sufficient information to determine the correct or most accurate match to the ZIP + 4 product and, therefore, may not provide a ZIP + 4 code. That means the mail piece needs “additional handling,” or needs to be processed manually. After an address goes through the CASS process and is not resolved, it becomes a candidate for AEC. If you send direct mail or non-profit communications, a service like this can add up to thousands of addresses!

Step 4: Ensure Addresses Are Compliant

Did you know that there are compliance rules and regulations for mailers? Depending on the type of mail, and what you are sending, there may be penalties for not following specific data quality standards. If your business is sending personal health information or personally identifiable information, you should be in touch with a Quadient expert to ensure that your address quality meets specific standards.  

Regulations and guidelines also instruct mailers on what they should or must do when they lose contact with a customer. If you work in the healthcare, financial or insurance industries you may have regulations regarding ensuring that you are using address validation technology and have set procedures for handling UAA mail. 

Step 5: Assess the results

By following the four steps and best practices to reduce undeliverable mail, you can get your data up to the 3 Cs of address quality. This doesn't just help your business get postage discounts, it also helps reduce the costs of undelivered mail on your business, such as delayed invoices, lost sales and marketing opportunities, reduced cash flow and customer dissatisfaction. Inform other departments, like accounts receivable, that you are focusing on address quality and check in with them for feedback on your effort. 

The 3 Cs of Address Quality

• Complete: All required elements of the address are present
• Correct: The addresses are accurate
• Current: The addresses reflect the recipient’s most recent address

Take the Next Step: Learn About Quadient's Address Correction Software

We want to help you stop losing money on undeliverable mail. Learn about Quadient's e-Validate, a simple cloud-based address correction service that helps you quickly and easily validate customer addresses and ensure that bad addresses don't become a significant cost issue. 

Just download the e-Validate brochure. Or contact a Mail Expert to learn more about how address correction software can impact your business! 

get BROCHURECONTACT QUADIENT