The Economic and Business Implications of Poor Addresses

Addresses play a pivotal role in the success of any business, as they are the key to converting and retaining customers. It may come as a surprise, but having accurate and complete addresses is crucial for any business to thrive. The failure to find a location due to a missing, incorrect or poor addresses in a database can incur a staggering economic cost of around 10-14 billion USD per year.

However, the problem goes beyond mere inconvenience and has a significant economic impact on the nation. Incorrect addresses can create significant obstacles and waste precious time for businesses and individuals alike.

The price of a poor addresses goes beyond the simple shipping costs of sending an order twice. Moreover, it wastes time, money, and could prevent future purchases. A single wrong address can reduce the profit margin of multiple perfectly delivered items for many eCommerce companies.
Often, addresses can be incorrectly entered, leading to misplaced delivery or location. This is a major issue, as these items often contain valuable commodity or data that needs to be kept safe and secure.
As a result, the pressure on delivery services increases, and additional work is required to ensure that parcels and documents are delivered to the right addresses. This can result in delayed deliveries, frustrated customers, and a negative impact on business operations.

The Plight of E-commerce, Logistics & Transportation Industry 

The logistics and transportation industry is highly important for the global economy, enabling the transportation of goods and services worldwide. However, this sector has been experiencing significant difficulties. Due to incorrect addresses, which have become a major hindrance to their operations.
Returns can be a costly affair for e-commerce businesses. As the cost varies depending on the size and weight of the item. For smaller items, the return cost can range between Rs 50-150, while heavier shipments can cost up to Rs 500-600. These costs are typically based on the logistics costs incurred by the platform for delivery.

As per RedSeer’s report, businesses may end up paying 10-15% of the order value as costs due to returns, which can significantly dent their profits.
For instance, Meesho – one of India’s promising e-commerce brands posted their largest expenses as logistics and fulfillment costs which grew 4.4 times i;e Rs 2829 crore in FY22 from 632 crores in FY21. (Source: The Economic Times)

Many international logistics companies like UPS raised their charge to $18.00 per package for domestic and international shipments in 2022. Similarly, FedEx’s address correction charge for deliveries using their Express Multiweight pricing rose to $19.50 per package in 2022.

In fact, some companies end up with 20, 30, or more address correction charges per week. This equates to an unnecessary expense of more than $18,000 annually for just 20 incorrect or poor addresses per week. It’s clear that businesses can benefit from investing in accurate addressing data. So that they avoid these costly charges and improve their bottom line.

Example of last mile delivery shipping cost before & after correcting addresses

Assuming the above scenario:

  • Last-mile delivery before correcting the address
  • Last-mile delivery after verifying & correcting the address
  • Assuming the cost of delivery at INR 50
  • Total number of delivery = 1000
  • Cost per delivery = 50
  • Cost of return = 50
  • Loss incurred  before validating address = 22%
  • Loss incurred after validating address = 11%

Clearly indicating how validating and correcting addresses can lower the loss for delivery business and save time and money.

Let’s analyze the impact of poor addresses in the Banking and Finance sector:

According to the latest report by Inc42 on the State of Indian Fintech Ecosystem in Q3 2022, the digital lending industry in India is projected to grow at a Compound Annual Growth Rate (CAGR) of 22% between 2022 and 2030. This growth trajectory is expected to catapult the market size of digital lending from $270 Bn in 2022 to a whopping $1.3 Tn by 2030.
With the lending industry being penetrated aggressively in the last couple of years in India, the number of NTC (New-to-credit) consumers is growing rapidly. In 2021 alone, around 35 million consumers in India opened their first credit product. While an additional 31 million became NTC in the first nine months of the following year.

India’s socio-economic development has led to an increasing number of women, youth, and rural consumers becoming profitable customer segments for lending organizations.

However, major challenge for organizations with new-to-credit (NTC) customers is the lack of credit history. Without a credit history, it becomes difficult for lenders to evaluate an NTC customer’s willingness and capacity to repay loans.
Assessing the creditworthiness of NTC customers is a critical aspect of the lending process. A lack of credit history may lead to higher risks of defaults, resulting in financial losses for the lending organization. Therefore, many lending organizations may require additional documentation or collateral to mitigate the risks associated with lending to NTC customers.
But, most loan applications get rejected during the initial stage of verification of address only because of the poor addresses. As validating addresses is an important part of the loan qualification for many lending organizations. Inaccurate or inconsistent address information can create doubts about the identity of the applicant. And, their ability to repay the loan, which can lead to rejection of the loan application.

Why does your address matter during loan application?

There are many vital use cases for validating addresses, the two most important are –

  1. Mitigating fraud: Verifying the address of an NTC customer is one way that banks and lending institutions can confirm the customer’s identity and prevent fraud. By validating the address, the lender can be sure that the customer is who they say they are, and that the loan application is legitimate.
  2. Collection of dues: In case the NTC customer fails to repay the loan on time. And the lender needs to initiate recovery proceedings, it is vital for the lender to have the correct customer address. This ensures that any notices or legal proceedings can be delivered to the correct address.

Additionally, if the address information provided by the applicant does not match with the information available on other official records or databases, such as credit bureau data or government records, it can also trigger suspicion and lead to the loan application being rejected.

Therefore, it is important for loan applicants to ensure that they provide accurate and consistent address information on their loan applications to avoid any unnecessary delays or rejections in the loan approval process.


The economic implications of poor addresses can range from lost sales and missed opportunities to increased operational costs and reduced customer satisfaction. Therefore, it’s crucial for businesses to prioritize address verification. Moreover, ensure the accuracy of customer data to avoid these economic implications.  Address accuracy may seem like a small detail, but its importance cannot be overstated in today’s competitive business landscape. Businesses can take proactive measures by implementing resources like location data and intelligence, enabling the organizations to gain a competitive edge over others.

Moreover, businesses can gain comprehensive insights into the accuracy of their addresses by adopting address quality API. By using GeoIQ’s address quality API, businesses can identify missing components and filter out unreachable addresses throughout India. Not only will it help businesses solve complex decisions. Also, understand different attributes of the specific location to assess buying intent, RTO, collection models, and much more.

Location intelligence platforms offer businesses a wealth of information. It include economic health, behavioral patterns, psychographics, and other important attributes of a particular area or pin code. With this data, businesses can gain a thorough understanding of the area. And, analyze the information to generate meaningful insights relevant to their specific use case. For example, by analyzing typical rental rates, income levels, housing prices, and other relevant data attributes, lending organizations can gain insights into the characteristics of the user group in a particular pin code. These attributes play a vital role in understanding user behavior, purchase intentions, and creditworthiness.

It acts as a powerful tool to gain insights into the characteristics of a locality or pin code. By leveraging this data, organizations can make informed decisions, optimize their operations, and tap into previously untapped customer segments, such as new-to-credit customers, to drive growth and profitability.

For more details on how our address quality API and location intelligence work, please get in touch with us at, or visit our website.

Scroll to Top