I've seen shipping labels with HTML encoded characters, like é and è. I'm not sure if that's better or worse:
Łódź
Łódź
Fun fact: I was looking for an e-mail solution for a small company about a decade ago and found Zarafa. It seemed nice and I deployed it happily. Just to find out it only supports the Western European ISO codepage which was hardcoded. I hope they have switched to UTF-8 since then.