What is a Delivery Exception? (And How To Avoid Them)

If you’re a small e-commerce business, you know how satisfying it is to complete a successful delivery to a happy customer — and hopefully get a good review! But it’s not always so easy to make that delivery — and delivery exceptions can make life difficult for online shoppers and retailers alike. At worst, bad online reviews because of delivery problems can harm the reputation of your business and reduce customer trust.

Often, the first you’ll know about a delivery problem is when a customer gets in touch because they’re received an exception notice, and they’re confused and worried. Exception notices are often badly worded and don’t explain what’s going on, which makes it hard to solve the problem.  In this article, we’ll explain what a delivery exception is, and look at some common reasons for problems like delayed or damaged packages. Then we’ll look at steps you can take to reduce issues in future. 

What is a delivery exception?

A delivery exception means that a package is delayed on its way to the customer. This can happen for many reasons. There could be problems with a carrier like USPS or Fedex, problems with the package itself like an unreadable or missing label, or uncontrollable events like bad weather or wildfires. 

As an e-commerce business, if you’re in control of your own shipping you probably have a delivery management system that helps you avoid or fix delivery exceptions. But if your order fulfillment depends on a third party — whether that’s a big global shipper like UPS or a local courier — you’ll need to understand exactly what kinds of exceptions you might face, and how to deal with them. 

Let’s take a look at the most common delivery exceptions. 

Common types of delivery exception

As a business, you need to understand the different types of exceptions that can cause delays. Here are the six most common types of shipment exception:

1. Missed deliveries

This is when the delivery driver can't deliver the package to the customer during the planned delivery time window. This often happens if the recipient isn’t available to collect the package at the shipping address, or if the location is hard to access, like an apartment in a secure building.

2. Damaged goods

Sometimes, packages get damaged during transit, which can mean broken items on delivery. This can happen due to rough handling, improper packaging, or accidents during transportation.

3. Incorrect addresses

Delivery exceptions sometimes happen when the customer's delivery address is incomplete or wrong, when a shipping label is missing or illegible or when there are missing documents. This can lead to delivery delays, failed deliveries, or packages being delivered to the wrong address.

4. Delayed shipments

Delivery exceptions can also happen when packages just don’t arrive on the expected delivery date. Delivery delays can be caused by inefficient delivery systems, or by unforeseen circumstances like poor weather conditions or natural disasters. Customs delays for international shipping can also cause delivery delays.

5. Refused deliveries

Sometimes customers simply refuse to accept a package. This can be due to a change in circumstances, a damaged package, late delivery or other reasons.

6. Lost or stolen packages

Packages are sometimes stolen during the delivery process, or they get lost due to misplacement or mishandling. Lost or stolen packages need immediate attention. 

What causes delivery exceptions?

Several factors can contribute to delivery exceptions. Understanding these causes can help businesses address and reduce potential issues. Here are the most common causes of delivery exceptions:

1. Traffic delays

Traffic delays from road closures and accidents on the delivery route can lead to delays in completing the last mile, and missed delivery windows.

2. Weather conditions

Severe weather like storms, hurricanes, tornadoes, ice or snow can cause major disruption to delivery schedules. 

3. Bad address information

Incorrect or incomplete address details, as we saw above, are a major cause of late and failed deliveries. A customer may have typed their address incorrectly, or your ordering system may have confused one Main Street with another. That will mean a wrong address on the shipping label, and an undeliverable package. 

Other address problems include missing labels, or labels that are unreadable because they’re badly printed.

4. Human error

Sometimes drivers misread addresses, or warehouse staff make errors in handling packages. Delivery personnel often contribute to delivery exceptions.

5. High package volume

Delays or missed deliveries often happen during peak seasons or busy periods, like around federal holidays. People shop more, and the increased volume of packages causes strain on logistics networks.

6. Inefficient delivery operations

Inefficient route planning and miscommunications can slow the last mile delivery process. Lack of funding can also contribute to delivery exceptions.

7. Technical or system failures

No system is perfect. Technology glitches and system malfunctions can disrupt delivery coordination, leading to late shipments.

8. Customer unavailability

If the customer is not available to receive the delivery at the time given, it can result in a missed delivery and a need for rescheduling.

9. Packaging or product issues

Packaging that fails to protect the item can lead to damaged goods on delivery. This leads to more returns and lower customer satisfaction.

10. External factors

Every business faces external factors during delivery that are outside its control. Things like strikes, natural disasters, or political unrest can all disrupt the shipping process.

How delivery exceptions hurt your business

1. Unhappy customers

When a customer has already paid for an item, not getting what they expected on time can make them very angry. Missed deliveries, delayed shipments, or damaged goods all lead to less customer loyalty and the potential loss of future business.

2. Reputational damage

Frequent delivery exceptions harm a company's reputation. Online reviews and social media mean that bad press is easy to find. Dissatisfied customers may share their negative experiences with others. Negative word-of-mouth can damage the brand's image.

Reputational damage is hard to repair. It may impact the business's credibility in the long term.

3. Loss of customer trust

It takes a lot of trust to buy something online from a business you don’t know. Delivery exceptions can erode that customer trust very fast. Customers rely on e-commerce businesses to meet their delivery commitments, and any exceptions can make them question the reliability and professionalism of the business.

Loss of trust may result in customers seeking competitors or refusing to make future purchases.

4. Financial costs

Delivery exceptions can result in financial losses for businesses, impacting their profitability and resources. The costs associated with reshipping or replacing damaged goods can be significant.

Your business may need to assess the financial implications of delivery exceptions and consider how they are reported in compliance with financial regulations, including SOX requirements. The Sarbanes-Oxley Act – more simply referred to as SOX – is a US federal law mandating specific practices to ensure businesses are financially accountable. As a small business with limited resources, staying on top of finances can be overwhelming, but tools like SOX software can help. This also allows you to analyze losses caused by delivery exceptions to identify changes over time and make improvements.

Three ways to address delivery exceptions

1. Prevention strategies

Prevention is the best way to address delivery exceptions. Here are some proven strategies to try:

• Post an easy-to-read explanation of your delivery process on your website, with clear instructions for customers about how to make their delivery process hassle-free. If you’re just starting out and using an e-commerce platform like Shopify or Etsy, your website doesn’t have to be anything fancy or expensive. Just buy a cheap domain and set up something simple. With your domain secured, you can also create a matching email address for sending delivery updates in real time.
• Make sure you capture the recipient’s address accurately when your customer places their order. If your order management or e-commerce software doesn’t take care of this automatically, and you’re not willing to change, make sure you confirm the address via email before shipping the package.
• Secure, protective packaging is the easiest way to avoid damage in the shipping process. Consider investing in custom mailer boxes that will protect items during shipping, and highlight your brand at the same time. 
• Double check all delivery and tracking information, including addresses, customer instructions, and barcodes, before shipping packages. 
• If you’re using one of the big shipping carriers like FedEx, UPS, or DHL Express, choose your pricing package carefully so that you have access to customer support and insurance if necessary. 
• If you  manage your own deliveries, train your delivery team to improve the supply chain by focusing on package handling, optimizing delivery routes, and dealing with potential exceptions. This will help with timely delivery.
• Ensure your delivery team understands the importance of accurate and careful delivery processes.

2. Real-time monitoring and notification systems

By using technology solutions that allow real-time monitoring of deliveries, you can find the current status and location of packages, allowing you to identify exceptions.

You can also set up notifications to keep customers in the loop about their delivery status. For instance, if you’re delivering during national holidays or inclement weather is due, it’s a good idea to let the customer know their delivery may be delayed.

It’s also a good idea to give customers a tracking number so they can find out about delays instantly.

Taking these steps allows you to notify customers quickly about any potential delays or exceptions, providing transparency and managing their expectations.

On top of this, it’s essential that small businesses have a user-friendly, branded website from which you can issue notifications or tracking services. It also provides a useful resource for them to troubleshoot if a delivery goes AWOL. Even if you don’t have a significant budget for this, 

3. Prompt communication and problem resolution

Most customers will forgive a lot from retailers who communicate promptly and honestly, and do their best to solve problems. If you encounter delivery exceptions despite tking all the measures we’ve discussed above, you can still rescue the customer relationship by offering clear ways to communicate with someone in your business who can actually solve their problem. These include:

• Phone: Traditional? Yes. Outdated? Not really. Many customers still prefer to pick up the phone when they have an issue, so provide a phone number for people to contact in case of a delivery issue.
• Customer support center: Medium-sized businesses with a higher frequency of calls might consider setting up a dedicated customer service center. Today, there are various digital platforms that will help your team handle incoming calls efficiently and effectively. For instance, the 8x8 inbound call center solution allows you to route calls to the relevant department and monitor interactions so you can optimize the customer experience in the future.
• In-app chat: If your delivery company uses a customer-facing app, make sure you use the chat feature. This way, customers can use the app as a central platform to place an order, follow its delivery route, get real-time updates, and quickly get in touch if there’s an issue.
• Email: A customer support essential, email is an excellent channel for customers to reach you. That said, responses aren’t as instant. So make sure to set up automated replies that let customers know you will respond shortly, and set your team a target timeframe for responding to customer queries and complaints over email. 

All contact information should be clearly listed on your website and delivery confirmation messages.

If you can’t solve the problem by rescheduling the delivery — for example if the package has been lost or damaged — be quick to offer a refund or replacement.