Return To Sender: Bad Address Data Costs U.S. Businesses Billions

Elvis Presley’s 1960s hit “Return to Sender” might have been about a lover’s spat, but in real life, the impact of “no such person, no such zone” is a serious problem. According to Bud Walker, chief strategy officer at the address and identity verification firm Melissa, the time, money and reputational costs caused by incorrectly addressing letters and packages are “humongous.”

“Mailing is a huge problem, data quality is a core problem and there are statistics out there that say [improper addressing] costs U.S. businesses hundreds of billions of dollars,” Walker said in a recent conversation with PYMNTS. “That’s no joke.”

He added that the more expensive the product being shipped, the more the problem grows — along with costs. But Walker said the good news is that faulty-data delivery problems are almost always avoidable — and easy to correct.

“It is a very simple thing to fix — but every time you don’t do it, it can potentially be a lot more expensive than correcting that problem at the point of entry,” he said. “Fixing the address can usually be done for fractions of a penny anywhere in the world.”

Errors Are A Widespread Problem

According to Melissa’s research, the average corporation’s customer list contains about 8 to 10 percent of duplicate data. In fact, Walker said the problem is so common that he makes a hobby of collecting the duplicate mail and catalogs that he personally receives under various iterations of his name or address.

Walker said that’s not only wasteful, but also undercuts consumers’ confidence.

“Databases that contain duplicate records are a reputational problem,” he said. “We’ve all received multiple pieces of mail, and to me, that looks like they don’t know how to check their database.”

He said the U.S. Postal Service estimates that it loses about 28 million pieces of mail a year, often due to addressing errors. But Walker said the particulars of correcting the problem depend on the company and the industry.

For example, he said that retailers risk shipping a product twice or having problems making a delivery at all. By contrast, law firms with large lists of clients and cases face problems if legal notices go undelivered.

A Morbid Trend

Meanwhile, Walker said one new area of Melissa’s business that’s been growing during the COVID-19 era has been verifying death certificates and dates of death.

Like so many other types of fraud that are rising due to increased digital traffic during the pandemic, Walker said scams involving death certificate information are on the rise, requiring information verification.

“It’s a little bit morbid, [but] it is something we do really well,” he said. “Not only do we link to the Social Security Administration and grab that Social Security [death] data, but we also bring in obituary data from all over the country, which gives us a really high veracity.”

Other Growth Areas

Another recent change to Melissa’s business has been an increase in smaller customers. “We’re seeing that the size and scope of companies that want to use some type of ID verification has changed,” Walker said.

He said that in the past, it was mostly large banks, cryptocurrency exchanges, conglomerates and social media platforms that used Melissa’s ID verification services. “But now we’re seeing smaller, Main Street-type businesses coming in and doing little look-ups to see if a name and an address match,” he said.

Melissa is also seeing new business from U.S. healthcare companies that are facing unique delivery logistic issues surrounding patient information.

“Those are two industries that we’ve identified as being very important right now, and that’s where we’re focusing on for next year,” Walker said.

Overseas, Melissa is seeing new business opportunities emerge in the Asia-Pacific region, especially in Indonesia, which is seeing a digital transformation and the emergence of new banking platforms.

A Constantly Improving Database

Walker said Melissa is always on the hunt for ways to improve its data sources. Those include dealing with the Universal Postal Union, using geolocation data and tracking telephone numbers and formats in 200 countries.

Whether it’s “James Parker” or “Parker James” at a street or post office box that a client company is trying to contact, Walker said Melissa’s mission is to get it right.

“The continued evolution of that product line for each contact data element is our focus,” he said. “We don’t want to diminish how hard that is to do in the real world, but it ties together with where identity [verification] is going and where our whole business around data quality is.”

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