In current times, the number and frequency of online transactions have increased manifold because of the increased usage of technology. Many online customers ask questions like “what is the difference between shipping and billing address” and “can they be same or do they have to be different”?
Both of these terminologies are often encountered while placing online orders on e-commerce sites like Amazon, Walmart, eBay, target, Etsy etc. The buyer needs to fill out the text boxes stating these terms in the order form.
The shipping address refers to a location where you would like your order to be delivered by the seller. The billing address is the address registered with your bank or financial institution and on which the documents like bank statements, invoices, letters and credit card bills are delivered to you via regular or over the night fast postal mail.
A customer’s shipping and billing address can be the same but they can also be different for some instances. For example, when you have shifted to a new home and have not yet updated the address with your bank or when you want the parcel to be delivered as gift to a friend or relative living in another location.
This article looks into the meanings of shipping address and billing address in more details and explains the difference between the two.
Definitions and meanings
Shipping address
Shipping address is the address where a person would like his purchased goods to be sent and is normally used when making transactions online or via phone calls. This address can specify any location in the world where the seller is able or promises to deliver the ordered item, and does not essentially need to be the same as the billing address.
Today, there has been excessive increase in online shopping and many people are purchasing items through the internet or telephone and having them delivered to entirely different locations than their billing address or residence, and it can even be a different country. In any online transaction, the amount deducted as shipping charges essentially depends on the shipping address i.e., the location where the buyer would like his or her order delivered.
During online purchase, customers need to write down their correct shipping address as a part of filling out the order form. When purchasing through phone call, they need to inform the operator about the complete address pointing to a genuine location. The shipping address needs to be accurate and complete in all respect or else the buyer might not get his or her parcel delivered correctly. Often, the seller provides a check box in the order form saying “same as billing address” and the buyer can click on it if his or her shipping and billing address is the same.
Billing address
Billing address is the address associated with your bank and the payment method you adopt such as your debit card or credit card. It also includes alternate payment methods and like PayPal, Payoneer or Skrill etc. While performing an online purchase, the billing address is an important factor that needs to be filled out or the transaction will not be processed.
The billing address that a buyer provides in the order form needs to be the same as that of the debit or credit card and the one registered in his or her bank details. All bank statements, invoices and paper bills are delivered to this address. Therefore, the billing address must be the one where the buyer resides or from where he can collect his postal mail easily and timely.
The billing address also acts as an additional security check against online cases of theft and information manipulation etc. For example, if a person finds a valid credit card, visits a shop and purchases an item costing a reasonably small amount, most people would let the process go through without any sort of security checking. But, however, if it were the case with an online transaction, the card wouldn’t do any good because the person would not be able to provide the billing address which is an additional security measure.
For many years when e-commerce was in its infancy, all that was required for an online purchase was the card number and the expiry date printed on the face of the card. But, today, a 3 digit code known as card verification value (CVV) is also printed at the back of the card which needs to be provided along with the billing address. This is all to ensure that the card actually belongs to the person placing the order or he is its authorized user.
Difference between shipping and billing address
Some main points of difference between shipping and billing address are listed below.
1. Meanings
The shipping address is the location where the online customer would like his purchased items delivered. In relation to an online transaction, the billing address is the location which is registered with customer’s financial institution (e.g., bank etc.) and on which the customer will receive the bill of his or her credit card. This location, in most of the cases, is the customer’s residence.
2. Nature of address or location
A shipping address is physical address used for transportation of purchased items whereas the billing address is mostly used for accounting and payment related activities.
3. Purpose in online transaction
The purpose of the shipping address is to know the correct location to deliver the order accurately. The purpose of billing address is the verification of authorized use of debit card or credit card etc.
4. Way of address verification
A shipping address is verified by an address verification system during later stages of transaction, usually just before the delivery of order. Billing address is verified over a telephone call or through mail. It does not necessitate being done online.
5. Effect of providing incorrect information
The billing address is required at initial stage of transaction. If an incorrect billing address is provided, the transaction will fail at its first place. On the other hand, if incorrect shipping address is provided, the transaction will take place but the customer will not receive his item as the location is wrong. There’s a risk that the customer will lose his money unless he contacts customer support to track and revise his order.
Shipping address versus billing address – tabular comparison
A comparison of shipping address and billing address in tabular form is provided below:
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| Meaning | ||||
| Refers to the location for delivery of purchased items. | Refers to the address registered with the bank and/or associated with the payment methods like debit or credit cards | |||
| Nature of address or location | ||||
| Essentially used for transportation of goods | Required for accounting and payment activities. | |||
| Purpose in online transaction | ||||
| Authenticity of location for delivery purposes. | For verification of authorized use of cards. | |||
| Way address of verification | ||||
| Involves address verification system used by company. | Can be verified via call or email. | |||
| Effect of providing incorrect information | ||||
| The purchased item will not be delivered; it will be returned to the seller. Buyer need to contact customer support to track and revise the order. | If the seller focuses on the verification of billing address, the transaction will not go through. | |||
Conclusion – shipping address vs billing address
The billing address and the shipping address are two separate pieces of information that online sellers often collect from customers. The buyer needs to provide both of them correctly and completely if he wants his or her online transaction to take place smoothly and then receive the item on time and without any hazard.
As stated earlier, the two addresses need not be the same to complete the transaction. The billing address depends on what payment method is being adopted by the buyer and the shipping address depends on what is the final destination of the item where the buyer would want it sent. The final destination of your order may be your own residence or the residence of your friend, relative or someone else.
