What is RDI in Address Validation?

RDI or a Residential Indicator is a feature in our Address Validation products that indicates if the United States Postal Service (USPS) considers an address to be a residence or a business. It’s quite a popular piece of information, and for good reason; not only do our clients make use of this feature to make informed decisions but we use it to enhance several of our validation services.

It can be found in our Address Validation – US service, in the field, “IsResidential”.  Other services, like Address Insight and Lead Validation, use it to help distinguish between Business and Residential Leads.

What does ‘residential’ address mean to the USPS?

Since the RDI value comes directly from the USPS, one might assume that this value relates to mailing and shipping; and you would be absolutely right. In short, this value will tell you whether or not the USPS will provide shipping discounts to an address. For the USPS, it is generally cheaper to mail to residential addresses than business ones, and these saving are reflected in their shipping cost.

So will every business address always be marked as a business by the USPS? Well, not exactly. As with any system, there are edge cases and exceptions to the rule. The USPS is no different in this case. Here are some common examples of where it is difficult to accurately identify RDI addresses:

  • In rural communities that don’t have clear cut distinctions between business or residential areas.
  • Apartments and/or suites on top of businesses and retail stores, which are common in a lot of downtown or commercial areas.
  • Assisted living facilities.
  • Residential lofts in industrial parks.

So, while this is an extremely helpful piece of information, it’s important to know what the USPS – and by extension our services – mean when an address is recognized as a business or a residence; which again is related to the shipping costs associated with an address. That being said, the vast majority of the time, the RDI value is also a reliable indicator if an address is a business or a residence.

What can RDI do for me?

RDI can be used for a number of purposes.

  • Some of our customers use it to help better target their marketing and sales efforts, splitting them between residential and business, especially for mailing campaigns.
  • The RDI flag can also help identify when updated address information is needed for their client. For example, if a business deals primarily with B2B transactions and a residential address is provided, it might be worth double-checking to ensure the address is correct.  This same example can also suggest that an incorrect address was entered deliberately, which might be a precursor to fraud.
  • RDI can also be used to separate out addresses that may have cost differences when sending physical mail to them. As mentioned previously, the USPS charges less to deliver to residential addresses, while other carriers like FedEx and UPS charge less to deliver to businesses. With this in mind, RDI can be used to minimize shipping expenses when sending out physical mail.

We work with our customers to continue to find new ways to leverage the RDI flag for deeper customer insights, improved marketing and sales performance and create cost-saving business logic.


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