6 Ways Not Implementing Address Verification Service is Hurting Your Business

In this digital era, data is the new currency. When it comes to online shopping, banking, or any other task that requires private data, especially the customer’s address, it opens up the business to potential scams. With the increased risk of identity fraud, online address verification has become crucial to business efficiency. To ensure better customer experience and data security, it is important to validate address data using an address verification service. When a business starts to verify address information, it can also help in the long-term management of data. However, traditional firms and companies may not realise the significance of such a system. This post discovers, in detail, the ways not implementing address verification can hurt a business.

  • Increased Cost of Mailing

According to CNBC, 2019 was the year when online sales were higher than physical store sales for the first time in history. The pandemic caused a huge surge in these sales, however, the trend is still going strong. Keeping this tendency in view, deliveries increased as well. Unfortunately, bad actors marred this growth. Almost 51% of online shoppers did not receive their parcels in the same year. This can only mean two things. Either customers are accidentally filling incorrect address information, or fraudsters are ramping up their activities. Both cases fall back to one solution – an address verification system.

  • Waste of Resources

Building on the previous drawback of not verifying an address, it can lead to a hefty waste of resources. In addition to the mailing costs, such undeliverable products can eat up the man-hours of the company’s human resources. This can include preparation, packaging, and maintaining the inventory. 

The real problem lies when such packages return to the company and need to be reshipped to the correct customer if any. These dual tasks can consume the resources of the company.

  • Low Customer Satisfaction

Providing a smooth process for the customers is the primary priority of all businesses. However, one of the biggest disadvantages of not verifying address data is low customer satisfaction and retention. It becomes increasingly difficult for a digital business to secure its presence in the market when it cannot differentiate between real and fake customers. This is where a business can use online address verification to keep customer disputes to a minimum. It can help automate the verification of address data. Moreover, it will help save the time, money, and resources of the company.

  • Poor Regulatory Compliance

Many industries have strict compliance regulations, such as the finance industry and healthcare. They require companies to ensure the proper collection and maintenance of customer data. However, in absence of an address verification service, a company can find it difficult to comply with such regulations. Having a proper system to verify address data can speed up the process of getting compliance certificates. Moreover, it can also help in the long-term secure management of data.

  • Chargebacks 

Chargebacks are another problem that occurs in the absence of document verification. If a customer does not receive their parcel due to malicious activities by bad actors, they can open a dispute. In most cases, such conflicts are resolved in the favour of the customer. Therefore, resulting in increased penalties on the already struggling business. 

Chargebacks differ from normal refunds because customers process them through banks. In such disputes, the fees are higher than refunds. Thereby, putting a greater burden on the business expenditure.

  • Larger Carbon Footprint

The impact of not having an address verification system goes beyond financial and customer experience problems. In the shifting paradigm of the world, companies are focusing on reducing their carbon footprint. However, the packaging, shipping, and reshipping of undeliverable products can cause a spike in the carbon footprint of a company. This issue increases exponentially if the business has to deal with a huge number of such products. With an online address verification system in place, it will be easier to reduce the carbon footprint in the long run.


With the rising number of digital businesses, address verification has become an integral part of the process. Failing to verify address data can not only pose immediate problems, such as poor customer experience, but it can also be detrimental in the far future. On the other hand, integrating online address verification can help your business streamline data security and customer experience. In comparison with the manual process, a business can validate address data for a fraction of the cost. Overall, an address verification system can enable a business to scale without worrying about compliance issues and customer disputes.

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