As a seller, you want to process and ship out your customers’ orders smoothly and without delay, but sometimes issues arise that are out of your control. Of course, to the end-user — your customer — their greatest concern is receiving what they purchased within the promised timeframe, so it’s important to understand why some of your orders don’t make it to your third-party logistics (3PL) warehouse or, ultimately, your customer.
In a perfect world, your customers select their items, input their payment and shipping information properly, and press “submit order” to kick off a seamless fulfillment process. But, in reality, this isn’t always the case.
If you have a 3PL warehouse, fulfilling product orders should have few hassles. The order comes in and payment is processed. The order flagged as “paid” automatically triggers the next step in the process, sending the information to your 3PL to prepare and fulfill the order.
Issues arise when the order is held up between payment and being sent to your 3PL, which impacts your shipping times and your bottom line. Beyond the frustration of trying to figure out what the issue was, orders held up in digital transit can produce larger problems for your business.
For starters, the slowdown in getting your order out the door can result in poor reviews — especially if the issue persists past your anticipated shipping deadlines — which can hurt your future business and store rankings. Customers may also cancel orders or even request chargebacks from their credit card providers, dinging you with administrative fees and penalties on top of the revenue loss.
An important part of running your eCommerce business is regularly monitoring your orders to catch issues early so you can fix them and get the order out the door. I recommend a daily sweep of your store for unfulfilled orders every morning. Anything that came in prior to the 3PL’s cutoff time the day before should have been packed and shipped. Unfortunately, the occasional snag will arise no matter how careful you are. Read on to learn the five most common reasons your orders aren’t making it to your 3PL — and how to address them.
Here are the 5 most common causes for orders dropping
1) Address Verification System failure
Address Verification System (AVS) failures occur for a few reasons. One is when the credit card or payment method address inputted during checkout doesn’t match the address at the financial institution where this payment method is registered. This can be the result of simple human error (Oops, typo!) or can be a telltale sign of fraudulent card usage (more on that below). It can also be because there is a disconnect between your carrier settings and the address the customer has chosen. For example, an APO or PO Box address cannot be fulfilled if your carrier is UPS. It can also be because the customer has chosen to ship to an international address. Most US credit card processing companies only provide AVS for domestic address formats. In any case, AVS failure can halt order processing or set off a chain of events in your shop’s back end that results in the cancellation of the order altogether.
AVS filtering is a great way to protect your business from card cracking and other payment fraud, however, it can also wreak havoc on your operations if filters are too strict. AVS compares the street number and ZIP code a customer submits against the data on file with their bank. The AVS response is composed of a Y, N, or X value. For example, if your customer inputs the correct street number, but incorrect ZIP code, the AVS code will read “YN” for “YES, NO.”
Within your AVS filtering, you’re able to specify the level of checking and have your AVS filter take action based on the results, with filter checking ranging from Full (Y,Y only) to Light (YY, YX, YN, NX).
Your AVS filter ensures buyers provide the street number and ZIP code on file with the issuing bank, meaning it’s more likely those users are the actual cardholders. However, AVS matches are not a 100% guarantee, and AVS failure can create headaches. Using the Card Security Code (CSS) authentication in addition to AVS filtering can increase certainty and enable you to loosen those filtering checks.
There are tools available for address verification at the checkout stage that will ask customers to verify addresses that don’t seem correct. That should capture a lot of the address mismatch that comes from human error. When possible, set up an automated system to ask customers to check their address for errors, that should enable AVS success to push your order through.
2) Foreign characters in fields
Be honest: How many times have you forgotten your finger is on the “shift” button before you hit the first number in your street address while typing it in a field? (C’mon, we know it’s not just us!) Inputting information into address or billing fields must be done with care, but you already know that. We’ve seen some customers attempt the use of emojis in a field, another surefire way to see an order fail. An accidental foreign character can wreak havoc on orders, creating confusion and delays throughout the logistics process and preventing orders from getting out the door.
A common “foreign character in field” error stems from non-latin character usage (e.g., Chinese letters, Arabic letters, emojis) that causes a failure in the warehouse management system (WMS) verification process. This pauses or even cancels the order due to the system’s inability to read those characters. If your warehouse doesn’t have an alert system in place to let you know there is an issue, these are orders that could just sit stagnant in your store, unable to flow through the WMS.
One way to combat this is to restrict the use of foreign characters in fields in the first place, or by alerting your customer to the error before they submit their order (such as listing any characters that must not be used). By eliminating the problem before it happens, you’ll prevent orders being flagged in your WMS in the first place.
3) Too many characters in fields
Similar to “foreign character in field” issues, too many characters in fields can cause your WMS to reject orders as well. This often occurs with international orders where addresses may be longer due to an alternate language (e.g., French or German) or ZIP code discrepancies (e.g., Canadian postal codes, Hong Kong not using postal codes, etc). Make sure you check with your 3PL and find out what character count their system restricts in the address fields (WMS systems vary) and set input restrictions accordingly.
If you ship to other countries, check that the customer selected the correct country, which should allow different character limits in the address fields, and/or get in touch with your customer to confirm their address information is correct. This step should also require proper input of international phone numbers. Not only does this protect you from fraud, it will help the customer if there are any delivery or customs issues that require contact.
If possible, disallowing the use of characters over the limit readable by your WMS is the easiest and most straightforward way to curb this issue. If this is not an option, running a script to shorten common street titles (such as “Street” to “St,” or “Promenade” to “Prom”) can cut down on characters and push orders through without delay.
4) WMS API failure
An unfortunate reality of eCommerce (and technology as a whole), sometimes the systems designed to make business — and our lives — simpler fail.
Warehouse management systems are software solutions that offer visibility into your eCommerce business’ entire inventory. They manage supply chain fulfillment operations from the distribution center to your customer’s door.
Chances are, your WMS integration with eCommerce platforms requires an application programming interface (API) to allow you to connect your WMS with multiple shops, and when this stops working, operations go downhill fast. This is by far the most painful of the order failures, because it will cause just a few or all of the orders to be stuck in your store, unable to flow to fulfillment.
API failure means something went wrong with the API request for your order, perhaps as a result of a missing parameter or field, or an update to your software that’s broken the connection between your WMS and your shopping carts.
Your API is essentially the middleman between your store and your 3PL, taking requests (orders from your customers) and transporting the data to the system that takes care of it (WMS to your 3PL). Think of the API as a pipeline that data flows through. Any interruption in the pipeline will restrict or block the flow of information. The API streamlines the manual, time-consuming task of pushing orders through the fulfillment process to make your business more efficient. There are thousands of 3PLs and just as many WMS systems. 3PLs usually also have on-premise systems that are additional connectivity points where data gets lost.
Even the most solid API can have issues but ensuring that your 3PL is using connectivity tech that reduces these problems can ensure there is less friction between you and the 3PL but, more importantly, between you and your customers.
If your WMS API fails, it’s important to understand why and combat the problem with support from your IT team or warehouse’s team. As is often the case, the best defense is a good offense, and regularly testing APIs is a crucial tactic here.
Tip: Integrate all of your tools with Pipe17 as your central hub to avoid order routing mistakes, loss of data, and API failures.
5) Fraud filters
With card-not-present fraud on the rise, more and more fraud filters have launched to protect merchants and their customers. Fraud filters reduce chargebacks by filtering and blocking potentially fraudulent orders, and can either alert you to high-risk orders or cancel them entirely.
If your fraud filter app or tool is set to cancel risky orders automatically, it’s likely valid orders will slip through the cracks and be canceled without you realizing. If your app/tool requires human intervention to approve the order, you’re more likely to separate fraud from false alarms, but that doesn’t scale well. This is a critical stage in your buyer journey.
Shopify will authorize the credit card purchase, but automatically flows orders to the warehouse as soon as it’s captured and marked as paid.
One defense is to set up a system where the payment is not captured and marked as paid until you’ve had a chance to check the order. Once your order is set to “paid,” it will trigger order flow to your warehouse. This can be tricky if you can’t reach the customer for verification or don’t get to all these orders within 7 days. After that, the system will not allow you to capture the payment and you will lose the sale. Doing it this way also puts a hold on those funds in the customer’s credit card account, which might be difficult in terms of customer service.
Another option is to use a third party system like Pipe17, where you can set parameters to HOLD orders that meet certain criteria. Some customers want to hold B2B orders for manual review, or orders over a certain size (allowing you to check both inventory and/or fraud), or a certain SKU they’re keeping an eye on. Since websites like Shopify will automatically flow a paid order, you need other measures in place to make sure you don’t fulfill orders until you are ready.
Your fraud filters can include your AVS settings, too, so it’s extra important you pay attention to the occurrence rate of fraud filter issues with your orders and adjust accordingly.
For more information on how to prevent fraud, check out our article on seven fraud-prevention tips to protect yourself.
Wrapping up — Manage what you can’t avoid
Managing your eCommerce operations is a full-time job that requires precision and attention to detail. Even with every safeguard and best practice in place, you’ll experience difficulties from time to time as an eCommerce merchant.
To stay on top of your order status and ensure orders make it to 3PL, daily pull fulfillment reports and find any waylayed orders so you can determine why and get them moving as quickly as possible. Keeping an eye on what has been fulfilled will help your customer service department give more up to date information to requests, and what isn’t fulfilled will allow you to keep orders flowing and catch problems before they become a bigger issue.
With diligence and the proper systems in place, you can reduce the number of orders caught up in the process and return to what’s most important to you: growing your eCommerce business.