USPS pricing error results in $25M loss - ShipRx
Blog / USPS loses $25 million — and it’s their own fault
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USPS loses $25 million — and it's their own fault

At the beginning of January, the Office of Inspector General of the United States Postal Service released an audit report highlighting the Parcel Return Service – Consolidator Payment and Refund Errors. In the report, we learn that consumers return approximately 1 out of 6 online orders. With 70.3 million packages returned in fiscal year 2022, USPS reaped the financial rewards, generating $241.8 million in Postal Service revenue.

While that’s a step in the right direction for the Postal Service’s Delivering for America 10-year plan, it’s not all good news. In today’s blog post, we’ll share the significant loss discovered by the USPS audit and how you can make sure you’re not making the same mistake.

USPS’s misstep cost millions

Between August 2020 and October 2023, USPS’s Parcel Return Service saw $25 million in lost revenue due to pricing errors. How? USPS accepted 22.8 million packages through the Parcel Return Service at the wrong price.

While USPS did review prices between 2020 and 2023, it failed to note the type of facility (delivery unit or processing plant) where the return was collected— a major factor in determining rates.

The National Retail Federation placed total returns for the merchandise industry at $743 billion for 2023. For shippers, that amounts to a $14 billion industry. Getting its pricing and procedures for returns on track is just one step toward transforming USPS from a business in “financial and operational crisis to one that is self-sustaining and high performing.”

The audit states, “If past trends were to continue, we project the Postal Service would lose another $29.4 million through July 2026, in questioned costs.” To combat these figures, USPS announced a five-step plan to avoid errors like this in the future.

Are you making the same mistake as USPS?

One or two oversights might not significantly impact revenue, but USPS lost millions because of pricing errors. While these blunders favored the shippers, most shipping mistakes benefit the carrier.

Every year, billions of dollars in refunds go unclaimed from UPS and FedEx, boosting the carriers’ revenue and leaving customers holding receipts for services that weren’t carried out as guaranteed. For example, the USPS audit found that 1 in 6 packages in the PRS program:

  • Failed to meet contract requirements
  • Did not apply required scans
  • Applied the wrong scans
  • Held packages for too long.

Don’t let the carriers keep money that belongs to you. ShipRx parcel audit service automatically checks over 40 factors on every parcel you send to check for potential refunds. A missed delivery window here or there may not seem like it will add up to much, but we’ve helped our clients recover up to 5% of their monthly parcel spend through audits.

It took an audit for USPS to realize just how much they’d lost due to pricing errors. Don’t wait years to find out how much the carriers owe you. Get in touch with ShipRx today for a free savings analysis. We’ll assess your current strategies and propose a plan to save money on shipping expenditures.

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