UK retailers are missing out on up to £2.1 billion a year in unclaimed refunds for lost and damaged parcels, according to new analysis from Claimit, the UK’s leading AI-powered courier claims platform. This hidden cost is quietly eroding profit margins at a time when the sector faces unprecedented pressure.
As ecommerce continues to accelerate, so too has the volume of parcels being couriered across the UK – and so too has the number of parcels being lost or damaged in the process. More than 4.2 billion parcels were delivered in 2024, according to Ofcom’s 2025 report on parcel delivery performance – but the report also found that 1% go missing or arrive damaged.
That’s a staggering 42 million damaged or missing packages – each of which represents a potential claim for retailers. Yet Claimit’s research shows that over 40% of UK retailers never claim for lost or damaged shipments, deterred by opaque processes and resource-intensive workflows. This means that billions in recoverable claims are being written off by some of the country’s biggest retail brands – at a time when consumer confidence is fragile and every sale is hard-won.
Protecting profitability
With operating margins squeezed, unclaimed refunds represent a significant and overlooked opportunity to protect profitability. Andy Watson, co-founder of Claimit, points out each unclaimed parcel is “margin left on the table”, which, for some brands, is “the difference between breaking even and falling into the red.”
For many retailers, the gap is cultural as well as operational. Claims are often handled manually by customer service teams with limited visibility into courier performance or invoice discrepancies. Each missed claim represents lost revenue and wasted time navigating multiple carrier systems instead of focusing on customer experience.
“The process has been made so cumbersome for retailers through antiquated workflows that many simply give up. It’s astonishing how many major ecommerce brands are either writing off millions each year or deploying team hours to manage a process that can more efficiently and accurately be completed by advanced technologies,” Watson added.
A question of trust
Retailers also risk losing more than just revenue – they risk losing consumer trust. Under UK law, retailers – not couriers – are responsible for ensuring goods arrive safely, meaning every failed delivery risks damaging brand reputation and loyalty. With consumer confidence fragile and margins under pressure, the industry faces a choice: continue absorbing these losses or adopt systems and practices that bring transparency and accountability to the delivery chain.
The scale of lost and damaged parcels – and the billions in unclaimed refunds they represent – highlights a structural weakness in the UK retail ecosystem. As ecommerce volumes continue to rise, the complexity of delivery networks and fragmented claims processes is creating hidden costs that few retailers can afford to ignore.
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