Beyond the Box
Dr. Ben Stickle, Professor of Criminal Justice at Middle Tennessee State University, and Larry Fox, CEO and Founder of ZFLO Technologies, examine how ‘did not receive’ (DNR) claims quietly generate significant hidden losses across the last mile.
“Delivered” isn’t the end of a parcel’s journey—it’s where the financial damage often starts. Each ‘Did Not Receive’ (DNR) claim unleashes a cascade of hidden costs, including reshipping, appeasement, and administrative time, that quietly erode margins. Drawing on data and industry interviews, we developed a DNR cost calculator that quantifies these hidden losses and identifies five major cost drivers that make “delivered” far from the end of the story.
The Scale and Nature of the Problem
Package theft and misdelivery are rarely isolated phenomena. According to a 2025 victim survey by SafeWise, nearly 104 million U.S. packages were stolen, resulting in an estimated $15 billion in losses to consumers. These figures, while headline-making, reveal only the starting point of loss; they typically reflect the losses to customers, not the full downstream burden on retailers. Many more missing items go unreported or are misclassified; internal accounting systems often obscure the true “extras” (such as reship, labor, and appeasement) within general expense lines. Indeed, what retailers and carriers consider a “customer service issue” is increasingly a leak in the supply chain, a structural cost that scales with parcel volume and complexity.
Introducing the DNR Cost Calculator
To lift the veil on these hidden losses, we developed a DNR Cost Calculator. The tool is designed to transform qualitative pain points into quantitative estimates. It merges:
- Public benchmarks, industry reports, academic studies, and carrier surcharge schedules
- Retailer interviews and internal data to calibrate real-world parameters
- Cost-allocation logic, converting multiple hidden inputs into a per-case burden
Five cost drivers emerged from iterative modeling. In sample runs (across anonymized merchants), aggregate DNR loss rates ranged from 1.8% to 3.0%, with an average estimate near 2.5% of parcel-level gross revenue (i.e., item cost + standard shipping).
The Five Cost Drivers
Below are the five major levers through which missing or stolen parcels impose cost, each contributing to more than the item’s retail value.
1. Product Replacement
At first glance, the replacement cost is obvious: send a new item. However, replacement is rarely neat. Because of markups, replacement often wipes out the margin. In categories like electronics or beauty, retailers may absorb 50–70% or more of the retail value in lost margin. From our merchant interviews, some reported sourcing expedited replacement units from alternative suppliers at a premium freight cost, effectively pushing the replacement cost up by 10–30% over standard COGS.
2. Customer Appeasement
To preserve goodwill, merchants typically don’t stop at just replacing the product. They often issue discounts, partial refunds, gift cards, or store credit to mollify frustrated customers. According to the Omnisend survey (2025), 70% of theft victims received a refund or replacement, while others received store credit or a discount (23%).
| Beyond the Box: One DNR Claim, Real Costs |
| A single parcel valued at $50 may seem like a minor refund but the actual cost is far greater:
· Replacement product: $50 · Expedited reshipping: $25–50 · Customer appeasement: $10–30 · Claim processing: $15+ · Total per-incident cost: $100–145+ When thousands of these claims occur monthly, they don’t just dent margins they slice into the bone. |
3. Expedited Reshipping
When a customer reports non-receipt, delays further heighten dissatisfaction. To reduce friction, retailers often send the replacement via expedited shipping (e.g., overnight, two-day, or priority) at a premium cost. Expedited shipping incurs surcharges of $25–$50, which are often absorbed by the merchant. Many merchants absorb 50–100% of that surcharge rather than passing it to the customer.
4. Investigative & Claims Processing
High-value or suspicious DNR claims often trigger investigative workflows, which involve staff time, software tools, and third-party services to trace delivery, inspect camera footage, verify addresses, and liaise with carriers. Because many investigations end in “no recoverable evidence,” this labor is purely sunk cost.
5. Insurance & Reimbursement Recovery
Many merchants attempt to recoup losses through claims for courier liability or insurance. However, claims success varies; some merchants report winning only every other claim, and often at discounted settlement amounts.
Ripple Effects & Broader Impact
Even after accounting for the five direct cost drivers, the impact of DNR losses continues to ripple through operations and customer relationships. Each missing parcel chips away at trust; nearly half of the affected consumers report ordering less often, while others shift to using lockers or choose retailers with more generous refund policies. Behind the scenes, fulfillment and service teams absorb the extra workload of reshipping and claims management, draining time and morale. Repeated incidents can also strain accountability within delivery networks. At the same time, increasingly automated refund systems, meant to preserve goodwill, can invite opportunistic false claims. Taken together, these pressures create what researchers call a “crime tax”: retailers facing persistent losses raise prices by as much as 1.8%, spreading the cost of missing parcels across the marketplace.
| Example |
| A mid-sized retailer shipping 167,000 parcels per month used the DNR Cost Calculator to assess downstream losses. At a 2.5% DNR rate, they experienced over 4,000 missing packages monthly. The breakdown: 51% of costs from product replacement, 27% from customer appeasement, and 22% from expedited reshipping. Despite attempting reimbursement, their net recovery was negative. Total estimated losses: $385,000/month or $4.6 million annually, a margin risk hidden in plain sight. |
Toward an Industry Response
Missing parcels are neither inevitable nor the responsibility of a single retailer; they represent a shared vulnerability across the entire delivery chain. Tackling the issue begins with visibility: retailers and carriers should track DNR incidents by region, carrier, product category, and delivery method, building dashboards that expose patterns and key cost drivers over time. Sharing these metrics across partners enables benchmarking, highlights weak links, and supports smarter prevention efforts.
At the operational level, the focus must shift from a reactive to a preventive approach. The “Last Foot of the Last Mile” must be protected. Lockers and PUDO points help, but lack data visibility—leaving a blind spot in loss prevention.
Emerging technologies now extend that protection even further. One example: ZakTrak by ZFLO Technologies, a real-time tracker that alarms if a package is stolen and continues monitoring after delivery to verify receipt, reduce false DNR claims, and assist in recovery.
Technologies like this underscore a broader shift in parcel security, moving from preventing theft alone to verifying delivery truthfully, thereby closing the data gap that fuels both loss and fraud.
Beyond technology, data analytics and predictive risk-scoring tools can help identify high-risk deliveries before they occur. Clear liability agreements with carriers and customer education at checkout, offering safer options such as lockers or attended deliveries, round out a comprehensive defense.
By treating DNR losses as a shared, measurable business risk rather than an unavoidable cost of e-commerce, the industry can transition from reactive recovery to coordinated prevention, thereby reinforcing trust across the last mile and increasing the profitability of retail partners.
As parcel volume continues to rise, the vulnerability that emerges at the final step from curb to customer becomes increasingly consequential. A single missing parcel triggers far more than a refund; it cascades into operational costs, lost margin, and customer churn.
By applying a quantification framework like the DNR cost calculator, organizations can, for the first time, see how much value is being lost from their systems. But measurement alone is not enough. Only through coordinated mitigation, smarter delivery design, and shared accountability can we counteract the billions lost annually.
Parcel & post stakeholders must stop treating DNR claims as a customer service footnote and start seeing them as board-level margin risk.
About the authors
Dr. Ben Stickle is a Professor of Criminal Justice at Middle Tennessee State University and a former practitioner. He is a recognized expert and industry leader addressing loss in the last mile of delivery, with a focus on package theft. His work includes scholarly and practitioner-focused articles in Loss Prevention Magazine, The Mail & Express Review, Security Management, and Business Insider. Ben’s research has been featured in hundreds of news reports and websites, including Good Morning America, U.S. News & World Report, The New York Times, and Popular Mechanics. Ben has presented to dozens of organizations, including the US Postal Service, Loss Prevention Research Council, Post & Parcel Live, E-Pack, WMX, Reverse Logistics Association, and more. For more information, visit: www.benstickle.com/package-theft
Larry Fox is CEO and Founder of ZFLO Technologies. As an engineer and business owner, Larry has spent over 20 years utilizing his technical knowledge and experience to develop products and solutions across a range of markets, including audiovisual, IT, automotive, manufacturing, and IoT.
He has contributed to solving large and complex technical solutions for companies such as 7-Eleven, Harris Communications, Austin Community College, and F1 in Austin, Texas. For more information, visit: https://www.zflotechnologies.com/
