The Hidden Tax of Lost & Stolen Packages

The Hidden Tax of Lost & Stolen Packages: How Shipping Issues Eat Into Ecommerce Margins

Running an ecommerce brand in 2025 isn’t easy. Tariff uncertainty, higher ad costs, fulfillment challenges and shipping delays, every percentage point of margin matters. But there’s another silent cost most brands overlook: lost and stolen packages.

Most ecommerce stores treat it as the cost of doing business. But the reality is, it’s not just an operational pain in the butt, it’s an invisible tax. Fortunately, this isn’t like tariffs or ad costs, this is something you can control.

How Big Is the Problem?

1 in 6 U.S. households reports a package theft each year.
Carriers admit to lost and misdelivered packages, and peak seasons drive those rates higher.
For a $5M apparel brand, even a 1% loss can represent tens of thousands of dollars in revenue exposure.

Why It Hurts Margins So Much

Lost or stolen packages multiply costs:

Replacements: You’re paying for product and shipping again.
Chargebacks: You lose product, shipping, and processing fees.
Customer churn: A single bad delivery experience can erase future LTV.

It's a triple hit: lost revenue today, added expenses, and weaker retention tomorrow. And while 1% might not sound catastrophic compared to other costs, it’s the easiest to fix.

The Economics Behind It

Unlike tariffs or ad spend, package loss is unpredictable, which makes it difficult to forecast. But ignoring it has consequences:

It chips away at margins in ways many operators don’t model.
It adds unplanned variability to cash flow.
It drives hidden costs in customer support and brand reputation.

Smart operators treat package loss like any other margin pressure – measurable, trackable and fixable.

How Ecommerce Leaders Approach It

Track loss and theft rates by channel and carrier.
Factor true costs into margin models (COGS, shipping, refunds).
Explore proactive solutions that balance customer satisfaction with profitability.

The Takeaway

Lost and stolen packages may represent only 1–3% of orders, but the ripple effects extend far beyond those transactions. By treating it as a strategic margin issue, not just an operational nuisance, ecommerce leaders are turning a hidden cost into a source of predictable growth.