Data Enrichment & Validation

Address Verification Systems: Definitions, Use Cases, and Available Solutions

July 15, 2021
Inkit Team

It’s estimated that up to 20% of mailing addresses in the United States are inputted incorrectly. For the delivery services, such mistakes cause financial loss and disrupt shipment. Since logistics services cannot reach the destination at the first attempt, they keep redelivering orders several times. If they had a quality address verification system, they could have avoided such losses.

On the other side, many customers face complications with shipping address input at checkout. They have to give up on the purchase because forms are too confusing and require standard address formatting, which most buyers don’t know. As a result, the business loses profit again.

We have identified two main issues with entering a standardized delivery point address. Continue reading to learn more about them and, more importantly, about the modern way of solving them: address verification systems.

Key Address Verification Terms and Definitions

If you want to implement address verification in your company, you should differentiate between the main address validation approaches. It will help you adopt the most suitable method based on unique business needs.

Overall, there are the following address verification solutions to choose from:

Delivery Address Verification (DAV) is the process of checking the validity and deliverability of the postal address. The address is valid or mailable if it is CASS-certified (according to the United States Postal Service, USPS).

CASS certification includes the following standardization methods:

  • Using USPS abbreviations to clarify and shorten the address. For example, the standardized form of Avenue is AVE;
  • Spelling correction is the most challenging part, and it's the main reason for undeliverable addresses. But where it's possible, city names are corrected and standardized. For example, Pheonix — to Phoenix;
  • Uniforming city names. This means city names under one ZIP code have one standardized name. Thus, Empire State is accepted as New York under the same code 10001.

Delivery Point Validation means the highest level of accuracy in address validation. To perform it, the Address Management System of USPS checks the addresses. The valid address lists are not accessible for free, but some services are certified by USPS to perform DPV correctly.

Address Verification Systems (AVS) are services that check the addresses customers enter against ones recorded in the world's major shipping carriers. The process usually includes the following steps: address cleaning (the software corrects the typos in the names of cities and streets), address enrichment (missing components are added to the address), and address formatting or standardizing.

Address verification systems for the US addresses usually use the following resources to make the addresses deliverable:

  • Delivery Point Validation (DPV) data for primary address verification,
  • Locatable Address Conversion System (LACS) data to update renamed streets or other mailing address elements,
  • Data Enrichment/Address enrichment services to add the missing or secondary information, and
  • eLOT (enhanced Line of Travel) number. USPS uses this 4-digit sequence number to sort mailings in carrier-casing sequence.
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Why Does Address Verification Matter?

During the checkout process, it’s not uncommon for people to make mistakes in address input. Mistypes are even more frequent when buying via mobile devices, so the customers will appreciate an address verification opportunity.

Another consideration is shipping. From small online stores to large logistics companies, all shipments require the exact delivery point data. Losing a parcel is expensive; the package is hard to find and redirect. Even if successful, it costs energy and nerves to the employees of the sending company and the recipient, of course.

Address validation is also important in the world of a growing sharing economy. Sharing houses is impossible without pointing to the exact location with house numbers and making sure the address is filled correctly.

Industries That Most Need Address Verification Systems

Delivery point validation and address verification systems are universal. Any business that collects customers’ contact details and uses them for shipment can benefit from such software. Still, for some companies, delivery point validation and address verification systems are crucial. These are:

  • eCommerce platforms. Their primary purpose is to make an online business more accessible. Built-in shipping solutions make them convenient, but without accurate addresses, all the other features are useless.
  • Third-party logistics companies. For transportation and logistics-related services, address validation is the factor of profitability and reputation.
  • Vacation rental services. Any new home's location submitted by the user should go through thorough data validation, including the address verification process.
  • Insurance companies and any companies needing background checks.
  • Banking and other industries that send expensive parcels or sensitive paper documents.
address verification systems

In all these cases, customer experience significantly improves due to address verification systems. While businesses simplify their essential operations, starting from the checkout process, database management, delivery, and even regulations adherence.

Types of Address Verification Systems to Consider

Any of the following types of address verification software will be helpful for your business, but it's best to learn their working principles to make an informed choice:

  • Drop-down verification systems show the set of options for each field of the address. Most of the US retailers use this kind of address verification, reducing the time for filling the form and eliminating the mistyping possibilities;
  • Partial verification systems autofill the fields once one item is entered, for example, a ZIP code. Such a system simplifies and speeds up the entering process;
  • Post-entry verification systems appear as pop-ups with variants of address after the customer enters the data;
  • Type-ahead verification systems suggest real-time options to complete address lines. It's the most expensive kind of AVS, and, therefore, a less common one.

To have these types of address verification on your website, you can either integrate a third-party web solution or use an API. Address verification APIs enable you to add address validation to an existing software rather than use it separately. For example, Inkit Verify enables engineers to add address autocomplete and verification to existing shopping carts with just a few lines of code.

By predicting and autocompleting addresses, you can provide a faster customer checkout experience. And by confirming that the shipment address is valid and deliverable, you reduce lost shipments.

Ready to try automated address verification? Contact us for a demo.

Start verifying addresses today
Don't waste time and money dealing with lost shipments that never made it to your customers.
Start for free