The Postal Service missed out on at least $109 million in postage due and $54 million in potential refusal fees from October 2023 through February 2026, its Office of Inspector General found. Commercial shippers were using the center “as a free disposal service,” the audit said.
Its Mail Recovery Center, USPS’s lost-and-found for undeliverable and unreturnable packages, received an estimated 19 million packages in the 12 months through February. That was up 45% from the year before.
Return-to-sender packages made up about 62% of the center’s incoming packages in fiscal 2025. At the 50 highest-volume post offices the OIG sampled, 75% of dead-mail packages came from commercial shippers.
Many traveled as Parcel Select through consolidators that hand packages to USPS for the last mile. When one comes back, the fulfillment center listed as the return address has to pay the postage. That cost was at least $12.63 per package as of July. Processing a return can also cost a fulfillment center 20% to 65% of the item’s value, according to the report. Refusing a package can instead send it to the Mail Recovery Center.
USPS said the center returned 39% of packages to customers. The OIG found that less than 1% actually made it back. Customers filed 5 million missing-package complaints in fiscal 2025.
The OIG made nine recommendations, including charging the direct customer for return-to-sender packages and adding a fee for shipper-refused returns. USPS agreed or partly agreed with eight. It plans a cost-benefit study of a refusal fee by March 2027. USPS disputed the OIG’s dollar estimates and said it could not replicate them.
