Cash on Delivery
Cash on delivery is payment at the doorstep, the trust bridge that built emerging-market ecommerce, with teeth.
What cash on delivery is
Cash on delivery, COD, is payment at the doorstep: the order ships unpaid and the courier collects, in cash or by doorstep UPI and card, when the parcel arrives.
Why cash on delivery matters
In India and many emerging markets, COD built ecommerce: it let customers without cards, or without trust in prepayment, buy online at all, and it remains a major share of orders in those markets. For merchants it’s a trust bridge with teeth, conversion rises, but so do refusals, returns, and the cash-cycle drag of money that arrives days after the product does.
The merchant’s COD ledger
- Upside: conversion from first-time and low-trust buyers prepaid checkouts lose
- Downside: refusal at the door, RTO costs, and delayed remittance
- Fees: courier COD charges per collected order
- Fraud surface: fake orders costing real shipping both ways
Frequently asked questions
How do stores reduce COD’s downside?
Verify and convert: order confirmation by call, message, or OTP before dispatch filters the unserious, small prepaid incentives shift the willing, and repeat-refusal addresses earn prepaid-only status. The goal is keeping COD’s reach while shrinking its refusal tail.
Should new stores in COD markets offer it?
Usually yes, deliberately: refusing COD in a COD-habituated market hands those customers to competitors, while offering it unmanaged bleeds margin. The mature position is COD with verification, incentives toward prepaid, and honest per-order economics.