The True Cost of Failed Delivery

Did you know that UK retailers lose over £3.5 billion a year to late deliveries alone – and that’s before you factor in redeliveries, lost parcels or the support time that follows? When things do go wrong, the bill starts to add up fast.

Benchmarking from IMGR (the UK’s eCommerce association) puts the average cost of a lost order replacement at £148.21 per parcel, and even a late delivery carries a measurable cost to the retailer (approximately £94.54).

At Parcel Broker, we see every day how successful, first-try deliveries protect margins and customer loyalty. UK shoppers tell researchers their top delivery worry is a failed drop because no one’s home – and poor delivery can push a big chunk of customers to defect.

There’s also the sting of sustainability: past academic studies have shown that a second delivery attempt can raise per-drop CO₂ by 9–75%. These unnecessary miles are easy to avoid with the right options at checkout.

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What counts as a ‘failed delivery’?

In the UK eCommerce industry, a delivery has ‘failed’ when your parcel doesn’t meet the conditions you were promised at checkout: the right parcel, to the right person/place, within the advertised window, with acceptable proof and condition.

Why do parcels fail to be delivered?

These conditions cover a few common scenarios:

- Failed first attempt: The courier can’t complete the drop for various reasons (e.g., no one home, access issues, wrong address, age-check not passed), so it’s taken back to the depot or a service point for another try or collection.
- Late delivery: Even if the parcel arrives later, it’s a failure against your Service-Level Agreement (SLA) and still triggers both cost and customer impact (IMGR lists ‘late delivery – not within the expected time window’ as a failure scenario).
- Lost in transit: Parcel goes missing, and you must refund or resend.
- Delivered but rejected/undeliverable for compliance: Age-restricted goods or items needing a named-person signature that can’t be handed over (ID not shown, underage, or service rules) count as a failed delivery on that attempt.
- Delivered to the wrong place / inadequate proof: If a parcel is left somewhere the customer didn’t authorise (or proof is insufficient), it’s treated as a failed delivery and the retailer remains responsible under UK consumer law.

What are the risks of failed deliveries?

It only takes one missed drop for things to snowball. A single point of failure can trigger extra handling, service contacts, and a serious dent in customer trust – something that causes costs to rise quicker than teams might expect.

Direct financial hits (re-delivery, refunds, replacements)

There are clear price tags for delivery failure.

IMRG’s analysis of home-delivery outcomes shows the average cost of a replacement order after a lost parcel at £93. Resulting factors, like limited carrier liability, delivery credits and lost customer lifetime value, can be equally impactful.

Reputational damage (negative reviews and social proof that dents conversion)

Studies have shown that UK consumers are unforgiving when it comes to failed deliveries.

Polling from 2025 suggests that around two-thirds won’t buy again after a ‘delivery disaster’, and official monitoring shows customer satisfaction with parcel firms has slipped as volumes rise.

Environmental impact (extra miles, emissions and missed sustainability targets)

Failed delivery can also be costly, not just for the retailer, but also for the environment. UK academic work on last-mile deliveries has shown that a second attempt increases per-drop CO₂ by 9% to 75% (depending on your round’s failure rate).

At a 50% failure assumption, emissions rose from 181g to 271g CO₂ per drop! Multiply that by peak volumes, and these figures become difficult to ignore.

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