Understanding the Impact of INR Claims

When was the last time a customer reached out and said “I never received my order”? What do you do when they reach out? Naturally, you take a look at whatever info you can grab from your carrier, only to discover they show the package as delivered. So then what? Do you…

1. Refund them? 
2. Ship them a new item? 
3. Tell them sorry, it’s your problem? (is it worth losing costly acquired customers over this?)

The Frequency and Cost of INR Claims

The scenario described above is something every merchant will deal with at some point in the life of their business. It is often referred to as “item not received” or INR for short. Dealing with these issues can be costly without a clear or obvious best answer. According to Security.org’s annual report, over $8 billion worth of packages were stolen in 2023. This number doesn’t even include how much money is lost due to delivery fraud every year - likely of a similar magnitude.

Common Scenarios Leading to INR Claims

So what really happens when a customer claims they didn’t receive their package as intended? The package was either:

• Stolen from the shipping address (unfortunate, highly possible, and often creates a negative association with the brand)
• Lost in the supply chain (possible and hopefully eventually found)
• Delivered successfully but the customer is engaging in fraud (very uncool)

All of these options are a headache and finding out which scenario occurred is almost impossible to figure out. In any case, the merchant is on the hook to right the situation to keep customers happy.

The Burden of Navigating Claims

In response, merchants have to spend precious time navigating the claims process with little success. Delivery fraud and theft can amount to a huge issue for merchants thanks to the associated costs of dealing with insurance, delivery partners, customers, and not to mention the lost merchandise. Merchants have to balance this negative experience by providing stellar customer service to maintain customers as acquisition costs can be hefty in a highly competitive e-commerce space. 

The Need for a Solution

Something has to be done about this problem and soon. AI is already used to optimize aspects of the supply chain to include forecasting demand patterns and improving warehouse fulfillment. So why shouldn’t the delivery process use similar technology? Thankfully with machine learning we can identify key insights from data to reveal trends in delivery fraud, theft, and more. Merchants can then use this information to make data driven decisions to mitigate the costs and hassle of INR claims. 

See how Deliverlitics’ Shopify App is leveraging AI to reduce delivery fraud here.

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