The estimate uses industry error rates: 7.2% of shipments typically have late delivery issues, 4.5% have billing/surcharge errors, and 2.1% have duplicate or unauthorized charges. These are multiplied by your shipment volume and average shipping cost to produce the annual estimate.
The estimate is directional, based on industry averages. Actual recovery depends on your specific carriers, service levels, and whether you file claims within the deadline window. Some sellers recover more, some recover less. High-volume FedEx Express shippers tend to see above-average recovery rates.
Each carrier has different error rates and refund policies. FedEx Express has the highest refund rate (92%) because of their Money-Back Guarantee on Express shipments. DHL international shipments have higher error rates due to customs complexity. UPS rates fall between the two.