If a user is getting a bounce back email when trying to send an email and have verified that the email address is correct, the email address type is likely MAILTO instead of SMTP.
Please do the following:
1) Add the user's mailbox locally or walk the user through the remaining steps below
2) In the "Sent Items" folder, find the original email that generated the undeliverable message
3) In the "To" section, hover over the contact that cannot receive the email
4) When the contact card appears, select the icon that looks like a sheet of paper ("View more options for interacting with this person")
5) Select "Outlook properties" option to open a window titled "E-mail Properties"
6) If the email type is MAILTO, click the "Internet Type" button and ensure that it changes to SMTP (see attachments)
7) Ask the user to resend the email and verify that an undeliverable is not received