Porch piracy, delivery fraud and the rising cost of lost packages

Porch piracy, delivery fraud, and the rising cost of lost packages

Delivery problems are becoming a larger retail challenge. For consumers, a missing package is frustrating. For retailers, it’s a growing financial and customer experience problem that extends beyond the value of the item itself.

As e-commerce volume continues to climb, so do delivery-related issues such as porch piracy, package theft, delivery fraud, and misdelivered shipments. What was once an occasional inconvenience is now a persistent challenge affecting brands of every size, particularly those shipping high-order volumes or premium products.

The issue is arriving at a time when retailers are already under pressure with rising parcel costs, tighter margins, and increasing customer expectations around delivery speed and visibility. Every lost package carries operational consequences that can ripple through customer service teams and fulfillment workflows, while also affecting long-term brand loyalty.

“We’re seeing fraud becoming more sophisticated,” said Emerson Hammer, director of partnerships at Corso, during a recent conversation with Kase. “There are online communities sharing ways to scam brands, and different groups will target certain industries or policies until they’re shut down, then they move to the next one.”

Package Theft Rises Nationwide

An annual porch piracy report by Omnisend found theft rose in 2025, with nearly 1 in 3 U.S. households (29.7%) reporting at least one stolen package during the year. Retailers had to bear an estimated $7.9 billion in refunds and replacement costs tied to lost or stolen deliveries, spotlighting the growing financial burden of e-commerce fulfillment.

On average, affected households experienced roughly 1.8 theft incidents and lost about $101 to porch piracy throughout the year. The issue intensified during the holiday season, with December emerging as the peak month for theft activity, while clothing, shoes, and jewelry ranked as the most frequently stolen retail categories.

Urban Deliveries Face Higher Risk, but Suburban Incidents Increasing

While porch piracy remains one of the most visible forms of package theft, it is only part of a much broader delivery challenge. In many cases, packages are not stolen at all. They are delivered incorrectly, misplaced in apartment complexes, damaged in transit, or delayed long enough to create customer distrust.

According to Corso, dense urban environments continue to present some of the highest exposure points for delivery problems. Apartment buildings without secure package storage, common delivery areas, and large numbers of daily shipments increase the likelihood of both theft and accidental package mix-ups.

“Even when the carrier technically delivers the package correctly, someone else might grab it,” Hammer explained. “This is more likely to happen when you have 50 people in an apartment building sharing one delivery area. A neighbor might accidentally take the wrong package, and sometimes intentionally keep it.”

Sean Kim, vice president of parcel at Kase, explained that carriers are actively working to mitigate causes in urban areas, while noting an increase in suburban incidents.

“While urban areas still see a high concentration of theft, we’re also seeing more incidents in suburban neighborhoods,” said Kim. “Some of that is because carriers have improved delivery processes in dense city environments, while suburban areas often have longer delivery windows, less visibility, and packages sitting unattended for extended periods.”

The impact reaches consumers quickly. Delivery expectations set by major e-commerce marketplaces have created an environment in which buyers expect fast shipping, proactive updates, and immediate resolution when something goes wrong. When those expectations are not met, frustration tends to fall directly on the retailer, regardless of where the issue occurred.

The Hidden Cost of Shipping Issues

That pressure has intensified as shipping costs have risen.

“Most brands initially look at the shipping cost itself, but that’s usually the smallest loss in the equation,” said Kim. “The higher costs come from replacing goods, handling customer service issues, and the long-term impact on customer trust and retention. Customer acquisition costs are extremely high right now, so losing a customer because of a delivery issue becomes very expensive very quickly.”

Retailers are now balancing higher transportation costs with hidden operational costs stemming from shipping issues. According to Corso, most brands underestimate how frequently delivery-related problems occur and how expensive they become once labor and customer support are factored in.

“In general, we see about half a percent to 1% of shipments with some type of issue,” Hammer said. “That could be loss, damage, theft, or delivery problems. When you add in replacement costs, shipping, and the customer service time needed to resolve those claims, it can become 1% to 3% of a brand’s margin.”

The financial impact is rarely isolated to product replacement alone. Kim noted that carrier selection has also become part of the broader customer experience strategy for premium brands.

“Brands investing heavily in customer experience are usually prioritizing reliability over the absolute cheapest shipping option,” Kim said. “Bargain carriers are often focused on simply completing the drop-off. More mature carriers have years of delivery data, theft history, geolocation tracking, and better visibility into delivery issues before they escalate.”

A single missing package can trigger customer support tickets, carrier investigations, reshipments, refunds, and additional warehouse labor. Brands also face the less measurable cost of losing customer trust.

Consumers often expect retailers to handle delivery issues directly rather than redirect them to carriers.

“Too often, we see brands deflect the responsibility of damaged or lost shipments directly onto the customer, instructing them to navigate carrier claims on their own,” said Hammer. “That leaves a bad taste in the customer’s mouth. The expectation is that the brand steps in and makes it right.”

Small Fulfillment Errors Can Create Bigger Problems

The challenge becomes even more complicated during periods of high shipping volume, when fulfillment teams are already under strain and carrier networks are moving quickly to meet delivery windows. Small fulfillment issues that may have once gone unnoticed can now lead to lost packages and failed deliveries.

Faster shipping speeds also introduce new variables. While expedited delivery can reduce the time a package spends in transit, it also raises customer expectations for visibility and precision. Consumers increasingly expect accurate delivery estimates and real-time notifications that help them prevent packages from sitting unattended.

Brands that fail to communicate delivery timing clearly may inadvertently increase risk.

“If customers think a package is arriving Friday and it actually shows up Wednesday, that package could sit outside for days,” Hammer said. “Customers need visibility into when it’s arriving so they can plan around it.”

That growing complexity is also changing expectations around the role fulfillment providers play after a package leaves the warehouse. Rather than focusing solely on speed and outbound volume, many brands are looking to third-party logistics (3PLs) for better visibility.

“The role of a 3PL goes beyond getting a package out the door,” Kim said. “It’s about helping brands understand carrier performance, delivery visibility, and where risk actually exists throughout the shipping journey. The middle mile and final mile are often where the biggest problems happen, not necessarily the initial pickup.”

Shipping Protection Is Becoming Part of the Customer Experience

For many retailers, the conversation is beginning to shift from prevention alone toward resolution strategies. Instead of treating delivery issues as isolated exceptions, brands are building more formal processes around shipping protection, customer communication, and rapid claim resolution.

That shift has helped fuel interest in newer customer-facing shipping protection models designed to streamline claims and reduce friction for both shoppers and retailers.

Traditional shipping insurance often involves lengthy claim investigations, documentation requirements, and low approval rates.

Working with a 3PL or fulfillment partner can provide access to shipping protection and post-purchase support tools that would otherwise require substantial internal resources to manage. As shipping issues become more common, fulfillment providers are helping brands streamline claims, improve communication about deliveries, and reduce the customer service burden associated with lost, damaged, or stolen packages through integrations or internal technology features.

Many of these tools now allow customers to opt in to shipping protection at checkout and receive faster resolution when issues arise. Instead of navigating lengthy carrier investigations and manual claims processes, brands are building more streamlined systems focused on quicker communication and simplified resolutions.

Kim added that fraud prevention is also becoming a larger part of post-purchase operations as some consumers repeatedly report missing deliveries despite successful drop-offs.

“A lot of brands are realizing the same accounts tend to experience the same delivery problems over and over,” Kim said. “Technology tools that validate customer history, flag suspicious activity, and monitor repeated claims are becoming much more important as fraud becomes more sophisticated.”

The Post-Purchase Experience Is Under More Scrutiny

Retailers are realizing that post-purchase experience plays a larger role in retention. A fast and frictionless resolution process can often matter as much as the original delivery itself.

The stakes are particularly high for brands shipping premium products, fragile items, apparel, cosmetics, and electronics, where both customer expectations and replacement costs tend to be higher.

Kim also noted that packaging itself can unintentionally increase the risk of theft, particularly for premium brands shipping recognizable products.

“Highly branded packaging can sometimes act like a beacon. If someone immediately recognizes the brand or assumes there’s a high-value product inside, it naturally creates more temptation for theft,” Kim said.

At the same time, consumer awareness around package theft is growing. Smart doorbell footage, neighborhood apps, and viral videos have made porch piracy feel more visible and personal, even in suburban and rural areas that once viewed it as an urban issue.

The result is a retail environment where delivery confidence has become part of the customer experience itself. This now requires building systems that reduce risk and improve visibility, while taking steps to resolve inevitable shipping issues without damaging customer trust along the way.

This story was produced by Kase and reviewed and distributed by Stacker.