Address Validation – Benefits And Use Cases Explained

Melissa IN Team | Address Validation | , , , ,

Did you know that there are 288 places named Fairview in the USA? There are 5 more places in Canada and 3 in South Africa that share the same name! So, when someone tells you they live in Fairview, you don’t necessarily know the place they’re talking about until you get the state name or the pin code.

Businesses rely on street addresses not only to approximate delivery timelines but also to understand customer demographics and strategize marketing plans. This means that all the addresses in company databases must be accurate and complete. The only way to do this efficiently and effectively is with an address validation API.

What Is Address Validation?

Address validation or verification refers to checking addresses entered into a system against third-party databases to make sure that they exist and are correct. At the most basic levels, it aims at ensuring that:

  • the address exists
  • the address is deliverable
  • the address is free from spelling errors
  • the address is complete
  • the address is properly formatted

Let’s say an address is entered as “26 Chstnt Ave, MA, Auburn”.

Now, this address exists and is deliverable but it has a few errors and it is incomplete. An address validation API would verify its existence and return the address as “26 Chestnut Ave, Auburn, MA, 01501-1721”.

Thus, it cleanses, supplements and standardizes addresses to make your database more reliable and usable.

Benefits Of Address Validation

The benefits of validating an address go far beyond simply having the right address.

  • Accurate Shipping

Having the correct address and ensuring that it is current and deliverable ensures that deliveries can be made on time with minimal delays. Address validation also makes sure that addresses in a database are updated when cities change street names, etc. Last-mile delivery agents can pinpoint locations on a map and take the optimal route to save time and energy.

  • Simplified Checkout Processes

One way to validate addresses is by using an address autocomplete feature. Here, as the customer starts entering an address, the API generates options to complete it. This reduces the number of clicks required. In light of a study that showed 18% of US shoppers abandoning carts because of lengthy checkout procedures, using an address autocomplete tool could also improve sales conversions.

  • Protection Against Fraud

Having correct addresses is the foundation for complying with KYC and AML regulations. It keeps bad data from entering the database and thus lowers the risk of issues such as identity theft and database hacking. In the case of card-not-present purchases, address verification can be used to flag suspicious transactions and thus limit charge-backs.

  • Targeted Marketing

Marketing campaigns have the highest ROI when they are tailored to customer needs. A customer living in New York would not be interested in a store opening in San Francisco. Having accurate addresses empowers businesses to segment their audience according to locations as well as demographic inferences from the same and create targeted marketing campaigns.

  • Improves Brand Reputation

When put together, the above benefits improve customer service. Reliable addresses mean quicker deliveries which mean happier customers. Similarly, better protection against fraud makes your company more trustworthy. This improves the brand’s reputation in the market and sets you up for success.

Who Needs Address Validation?

Address validation is beneficial to many industries. This includes:

E-commerce Websites

Selling online is more profitable for retailers as compared to managing a brick-and-mortar store but it comes with its challenges. Your customers aren’t coming to the store, you have to send the product to them. Thus, having the right address is critical. If delivery fails, the company has two options – refund the money to the customer or pay double shipping to retry delivery.

Regardless of what you choose, the customer is not going to be too happy. Integrating an address validation API into your checkout process minimizes such occurrences.

Third-Party Logistics Companies

Anyone dealing with transportation and logistics needs valid, accurate addresses to provide reliable service. Delayed deliveries could mar their relationship with the sender and the receiver even though they may have been given the wrong delivery address to start with.

Apart from poor relationships, incorrect or undeliverable addresses could also lead to a waste of resources in terms of fuel as well as the delivery agent’s time. Address validation can help ensure on-time deliveries with minimal returns and optimize delivery routes.

Insurance And Financial Institutions

There’s probably a big difference between the insurance premium for a house in Fairview California and one in Fairview Alabama. Address validation tools help ensure that customer addresses received are correct and complete to help avoid such confusion. It also helps run background checks efficiently to understand a customer’s credit history and tailor services to match their needs.

Vacation Rental Services

Not everyone wants to stay in a hotel when they go on holiday. Vacation rental services are booming but when you’re listing a place, you must be sure of the location. Customers need to be able to rely on the listed address to approximate the location’s proximity to tourist spots, markets, bus stops, etc.

Address validation not only ensures that the listed address is correct, but can also convert street addresses to accurate latitude and longitude positions on a map.

Trading House And Crypto Exchanges

Coinbase, a USA based crypto exchange, has more than 56 million users in the first quarter of 2021.  And there are many such exchanges in the USA alone that witness a growing user base.

Governments across the world fear that cryptocurrencies such as Bitcoin will be used to fund illegal activities and are trying to regulate the use and holding of crypto assets. The best way to prevent any illegal, as well as fraudulent activities around crypto would be to employ effective KYC methods and follow anti-money laundering rules diligently.

Exchanges are mandated to collect and verify a user’s identity proof such as their social security cards, passport or driving license while registering on the platform and make sure that details shared are accurate. Along with these, a user’s email id and phone number should also be verified to absolutely make sure that the assets won’t fall into the wrong hands.

Since failure to adhere to proper KYC process can attract hefty fines, to effectively implement KYC process, exchanges use automation tools like the Global KYC & AML Check in Personator World. Tools like this help verify national ids worldwide faster while complying with international laws including the Anti-Money Laundering (AML), Bank Secrecy Act (BSA) and Politically Exposed Persons (PEP).

Finding The Right Address Validation Tool

Given the benefits and the different industries in which address validation can be applied, the question isn’t about whether the tool is needed or not but finding the best solution for your company. Melissa offers an Address Validation and Address Search API. Addresses can be verified individually or in batches. This includes addresses not just in the USA and Canada but in 240+ countries you may do business with.

The address check tool goes a step further by enriching your database with additional information such as the name of the person linked to the address, contact details and other demographic inferences. It is easy to integrate into an existing website and you’re assured reliable support. If you don’t trust the addresses in your database, start now with Melissa.