diff --git a/custom_components/parcelapp/const.py b/custom_components/parcelapp/const.py
index a992e4a..c990731 100644
--- a/custom_components/parcelapp/const.py
+++ b/custom_components/parcelapp/const.py
@@ -9,6 +9,7 @@
 STORAGE_KEY = f"{DOMAIN}_cache"
 STORAGE_VERSION = 1
 DEFAULT_RETRY_AFTER_SECONDS = 300
+MAX_BACKOFF_SECONDS = 3600
 DELIVERY_STATUS_CODES = {
     -1: "None",
     0: "Completed delivery.",
diff --git a/custom_components/parcelapp/coordinator.py b/custom_components/parcelapp/coordinator.py
index 09efbec..10e92e0 100644
--- a/custom_components/parcelapp/coordinator.py
+++ b/custom_components/parcelapp/coordinator.py
@@ -21,6 +21,7 @@
     STORAGE_KEY,
     STORAGE_VERSION,
     DEFAULT_RETRY_AFTER_SECONDS,
+    MAX_BACKOFF_SECONDS,
 )
 
 _LOGGER = logging.getLogger(__name__)
@@ -42,6 +43,7 @@ def __init__(self, hass: HomeAssistant, entry: ConfigEntry) -> None:
         self._store = Store(hass, STORAGE_VERSION, f"{STORAGE_KEY}_{entry.entry_id}")
         self._cached_data: dict[str, Any] | None = None
         self._skip_next_update = False
+        self._consecutive_429s = 0
 
         super().__init__(
             hass,
@@ -136,17 +138,24 @@ async def _async_update_data(self) -> dict[str, Any]:
                         retry_after = int(retry_header)
                     except ValueError:
                         pass
+                self._consecutive_429s += 1
+                backoff = retry_after * (2 ** (self._consecutive_429s - 1))
+                backoff = min(backoff, MAX_BACKOFF_SECONDS)
+                backoff = max(backoff, self._configured_interval_seconds)
                 _LOGGER.warning(
-                    "Parcel API rate limit hit (429). Backing off for %d seconds",
-                    retry_after,
+                    "Parcel API rate limit hit (429), attempt %d. Backing off for %d seconds",
+                    self._consecutive_429s,
+                    backoff,
                 )
                 if self._cached_data is not None:
-                    self.update_interval = timedelta(seconds=retry_after)
+                    self.update_interval = timedelta(seconds=backoff)
                     return self._cached_data
                 raise UpdateFailed(
                     "Rate limited by Parcel API (429) and no cached data available."
                 )
 
+            self._consecutive_429s = 0
+
             response.raise_for_status()
             payload = await response.text()
             payload_json = json.loads(payload)
diff --git a/tests/test_coordinator.py b/tests/test_coordinator.py
index f7bc410..e924157 100644
--- a/tests/test_coordinator.py
+++ b/tests/test_coordinator.py
@@ -57,4 +57,88 @@ async def test_parcel_update_coordinator(hass, aioclient_mock):
 
     # Assert the data was fetched correctly
     assert coordinator.last_update_success
-    assert coordinator.data['deliveries'] == recent_deliveries['deliveries'] # This is only looking at delivery data, not extra parcel info
\ No newline at end of file
+    assert coordinator.data['deliveries'] == recent_deliveries['deliveries'] # This is only looking at delivery data, not extra parcel info
+
+
+@pytest.mark.asyncio
+async def test_exponential_backoff_on_consecutive_429s(hass, aioclient_mock):
+    """Consecutive 429s should double the backoff, reset on success."""
+    from datetime import timedelta
+    fixtures_path = Path(__file__).parent / "fixtures"
+    with open(fixtures_path / "recent.json") as file:
+        recent_deliveries = json.load(file)
+
+    carrier_codes_url = "https://api.parcel.app/external/supported_carriers.json"
+    mock_api_url = "https://api.parcel.app/external/deliveries/?filter_mode=recent"
+
+    mock_entry = AsyncMock()
+    mock_entry.data = {"api_key": "test_api_key"}
+    mock_entry.options = {"update_interval": 600}
+    mock_entry.entry_id = "test_entry_backoff"
+    mock_entry.async_on_unload = Mock()
+
+    coordinator = ParcelUpdateCoordinator(hass, mock_entry)
+    coordinator.api_key = "test_api_key"
+    coordinator.session = async_get_clientsession(hass)
+    coordinator._cached_data = recent_deliveries
+
+    aioclient_mock.get(carrier_codes_url, json={"fedex": "Fedex"}, status=200)
+    aioclient_mock.get(mock_api_url, status=429)
+
+    # 1st 429: 300 * 1 = 300, floored at configured 600
+    await coordinator.async_refresh()
+    assert coordinator._consecutive_429s == 1
+    assert coordinator.update_interval == timedelta(seconds=600)
+
+    # 2nd 429: 300 * 2 = 600
+    await coordinator.async_refresh()
+    assert coordinator._consecutive_429s == 2
+    assert coordinator.update_interval == timedelta(seconds=600)
+
+    # 3rd 429: 300 * 4 = 1200
+    await coordinator.async_refresh()
+    assert coordinator._consecutive_429s == 3
+    assert coordinator.update_interval == timedelta(seconds=1200)
+
+    # 4th 429: 300 * 8 = 2400
+    await coordinator.async_refresh()
+    assert coordinator._consecutive_429s == 4
+    assert coordinator.update_interval == timedelta(seconds=2400)
+
+    # Success resets the counter
+    aioclient_mock.clear_requests()
+    aioclient_mock.get(carrier_codes_url, json={"fedex": "Fedex"}, status=200)
+    aioclient_mock.get(mock_api_url, json=recent_deliveries, status=200)
+    await coordinator.async_refresh()
+    assert coordinator._consecutive_429s == 0
+
+
+@pytest.mark.asyncio
+async def test_backoff_capped_at_max(hass, aioclient_mock):
+    """Backoff should not exceed MAX_BACKOFF_SECONDS."""
+    from datetime import timedelta
+    from custom_components.parcelapp.const import MAX_BACKOFF_SECONDS
+
+    fixtures_path = Path(__file__).parent / "fixtures"
+    with open(fixtures_path / "recent.json") as file:
+        recent_deliveries = json.load(file)
+
+    carrier_codes_url = "https://api.parcel.app/external/supported_carriers.json"
+    mock_api_url = "https://api.parcel.app/external/deliveries/?filter_mode=recent"
+
+    mock_entry = AsyncMock()
+    mock_entry.data = {"api_key": "test_api_key"}
+    mock_entry.options = {"update_interval": 300}
+    mock_entry.entry_id = "test_entry_cap"
+    mock_entry.async_on_unload = Mock()
+
+    coordinator = ParcelUpdateCoordinator(hass, mock_entry)
+    coordinator.api_key = "test_api_key"
+    coordinator.session = async_get_clientsession(hass)
+    coordinator._cached_data = recent_deliveries
+    coordinator._consecutive_429s = 9
+
+    aioclient_mock.get(carrier_codes_url, json={"fedex": "Fedex"}, status=200)
+    aioclient_mock.get(mock_api_url, status=429)
+    await coordinator.async_refresh()
+    assert coordinator.update_interval == timedelta(seconds=MAX_BACKOFF_SECONDS)
\ No newline at end of file