Written By: Tricia Green
The familiar beep or green light of a successful scan is the pulse of a modern warehouse. But when that sound is replaced by a different tone, or red light signaling a misread, it disrupts the flow of the entire operation, diverting those packages into a reject line for manual inspection. What looks like a simple smudged barcode turns into a costly bottleneck that has major cost implications.
Key Takeaways
- Scan failures are operational bottlenecks, not minor issues - a single unreadable barcode can halt automation, trigger manual intervention, and disrupt throughput across the entire fulfillment line.
- Manual handling dramatically increases cost per order - what takes seconds in an automated workflow can take 12–15 minutes manually which increases labor costs and reduces productivity.
- Errors compound quickly across systems - even small data entry mistakes can lead to inventory inaccuracies, delayed refunds, and additional shipping and service costs.
- Customer experience is directly tied to label performance - failed scans can delay shipments and refunds, increasing support inquiries and putting repeat revenue at risk.
- Reverse logistics is especially vulnerable to scan issues - returns processing relies heavily on barcode integrity. When labels fail, intake slows and data accuracy declines.
- Environmental and handling conditions matter - temperature swings, humidity, and conveyor friction can degrade labels, leading to peeling, smudging, or unreadable barcodes.
- Label quality directly impacts automation performance - high-contrast print surfaces, durable materials, and application-specific adhesives are critical to maintaining high first-pass scan rates.
- The right label is a profit protection tool - investing in purpose-built thermal labels reduces rework, protects margins, and supports scalable, high-volume operations.
The Hidden Costs of Scan Failures in Fulfillment Operations
Scan failures trigger operational disruptions that impact the entire supply chain.
Outbound Shipping Delays
Imagine a peak-season shift where every fiftieth package requires a manual override. It doesn't take long for the backlog to reach unsustainable proportions.
- Manual Rework - Failed scans at pick-and-pack stations force team members to stop, look up orders, and reprint labels, killing individual productivity.
- Sortation Stoppages - Misreads at automated sortation points can lead to recirculating packages, slowing down the entire conveyor system.
- Carrier Rejections - If a barcode is unreadable at carrier intake, it may be rejected or delayed, leading to missed shipping windows and frustrated customers.
Direct Labor Costs
While an automated scan takes less than a second, a manual return requires multiple touches. A warehouse worker must physically inspect the package, search for a packing slip or customer name in the system, and manually type in order numbers or SKUs. Industry data suggests a manual return takes an average of 12 to 15 minutes of active labor compared to seconds for an automated one.
Increased Error Rates
Although the additional labor adds to overall costs, a more significant issue is the high probability of human error. Manual data entry has error rates that average 1% to 3%, which triggers various expenses:
- Inventory Mismatches - When a worker types "SKU-101" instead of "SKU-110," you create inventory mismatches that create downstream impacts - that leads to overselling or lost inventory.
- Refund Delays - Manual processing is slower, averaging a 47-day lag in inventory reintegration. This triggers "Where is my refund?" calls to customer service.
- Customer Service Inquiries - The estimated cost of a customer service call to resolve a refund issue averages more than $20.
Each error creates a costly domino effect: the original processing, customer service time, return shipping, re-processing labor, and re-shipment. Industry estimates place the full cost of a single order error at $40-75, with complex scenarios reaching $100-250.
Lost Customers
Depending upon the product, after the first order, a typical customer reorders approximately 25% of the time. In addition, repeat customers contribute nearly 50% of total sales. A bad experience triggered by a label not scanning correctly puts these customers and your revenue at risk.
Reverse Logistics Breakdown
When a customer returns a package, it typically falls into one of these categories:
- Returns Portal - The customer logs into their account on the seller's site, initiates the return, and is emailed a PDF label containing the barcode to print and attach.
- QR Code Method - The retailer emails a QR code. The customer brings this code to a UPS Store, FedEx Office, Kohl’s or other shipping locations where the agent scans it and prints out the label.
- In-Store Drop-off - Some retailers allow customers to bring the product to a physical store, where employees generate the barcode and handle the return.
- Pre-printed Labels - Some retailers include a prepaid return label inside the original box.
Although you can’t control label quality for every customer return option, focusing on the labels you can control will reduce the profit drain from:
- Intake Bottlenecks - Damaged or curled labels on returned packages prevent automated check-ins.
- Data Accuracy - Manual data entry for returns is prone to human error, leading to inventory discrepancies that result in inaccurate stock counts.
- Customer Impact - Refund delays caused by processing friction lead to "Where is my refund?" inquiries, straining customer service teams and damaging brand loyalty.
Ensuring the labels at the store location or included with a shipment meet the proper standards will keep the costly process of returns in check.
What Causes Scan Failures in Fulfillment Operations
Even state of the art scanners are only as effective as the label they are scanning. Several factors contribute to no-read errors:
- Smudging and print degradation - inferior label materials often lack the durability to survive the occasional abuse inflicted by conveyors and other packages. A faded or blurred barcode leads to an increased amount of scanner misreads.
- Fluctuating temperatures and humidity - can weaken label adhesives, causing them to detach, wrinkle or peel.
- Robotic arms or automated guide rails - can catch the edge of a label and peel it off.
Whether it is a robotic arm catching a loose corner or a humid cross-dock wrinkling the face stock, a label that fails to remain flat and legible takes an essential data tool and turns it into a liability.
Preventing Scan Errors with Purpose Built Thermal Labels
The most effective way to eliminate scan-related friction is to ensure labels are designed for the rigors of the supply chain.
High Contrast, Scan Optimized Materials
UAL thermal labels are engineered with materials that provide a sharp, high contrast image, maximizing first pass read rates.
Adhesives Designed for Real-World Conditions
Depending upon the time of year, logistics operations will experience both hot and humid and cold and dry conditions. And those temperature extremes can impact improperly spec’d adhesives by curling, wrinkling and even detaching from the package. UAL adhesives are designed to resist temperature fluctuations and maintain their profile providing a reliable, high-volume labeling solution.
Printer Compatibility
A label is only half of the equation; the printer is the other. UAL labels are engineered to match the specific heat profiles and feed mechanisms of leading brands including Zebra, Honeywell, and SATO, maximizing printer uptime and operational productivity.
Why Fulfillment Teams Choose United Ad Label
Although labels are a small part of your entire supply chain, they can have an outsized impact on your bottom line. UAL serves as your operational partner providing:
- Lab-Tested Performance - Our labels are tested against warehousing conditions. From the moisture and temperature extremes to the speed and friction of conveyors, this process ensures they perform from your warehouse to the customer’s location.
- Scalable Support - With thousands of SKUs in stock and ready to ship, we ensure you have the products you need to run your operation during normal order flow and peak demand.
Prevent the 'no-read' cycle before it impacts your operation. Request a sample pack of our high-contrast thermal labels today.
Frequently Asked Questions
What is a scan failure in warehouse operations?
A scan failure occurs when a barcode cannot be read by a scanner, requiring manual processing instead of automated handling.
Why are scan failures expensive?
They increase labor time, introduce errors, delay shipments, and can cost $40 to $250 per affected order.
What causes barcodes to not scan?
Common causes include poor print quality, smudging, label damage, peeling, and environmental exposure.
How do scan failures affect returns?
They slow intake, require manual data entry, delay refunds, and increase customer service inquiries.
How can you improve barcode scan accuracy?
Use high-contrast labels, durable adhesives, compatible printers, and materials designed for your operating environment.
Do label materials impact scanning performance?
Yes. Higher-quality materials produce clearer barcodes and maintain integrity through handling and environmental stress.
Why is printer compatibility important for labels?
Incompatible labels can cause poor print quality, leading to faded or distorted barcodes that fail to scan.
How do better labels improve customer experience?
They enable faster shipping, accurate order processing, and quicker refunds, reducing friction for customers.