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How Ecommerce Merchants Reduce Returns on COD

Cash On Delivery
Dec 23, 2013 0 Comment

India is making huge leaps on eCommerce transactions. Customers want to shop on-line as they can dwell more time researching for better bargains or discover products which are hard to find in usual market place. So it won’t to be wrong to state that one need not to be in mall or local bazaar to buy new pair of shoes, you can now be on full time shopping spree sitting in office, while your boss thinks you are working ;)

One of the major reasons the eCommerce has taken up fancy of people is the user friendly option of payment offered by all major vendors – Cash On Delivery. This takes control of the trust factor, as customer can check the product before paying for it or can cancel the order if he is not happy with the product, delivery time or in case the product being dispatched is not exactly what the customer ordered.

Cash On Delivery from the merchant side is a big pain point as their services will be highly scrutinized with every order and customer will have the final say even after placing the order. Small or New merchants coming on eCommerce platform are reasonably worried to introduce cash on delivery feature. Some industry estimates the return rate on COD orders to be as high as 40% and merchant have to bear the two way logistics cost – sending goods to the customer and then delivering it back to the warehouse, which could be detrimental to many merchants trying to sell on-line on thin profit margins.

But in current scenario if you do not provide cash On Delivery option – you might be losing 70% of your potential customer base. The reason is if you are coming online and selling and customer do not know you, there is huge dis-trust factor plus the problems of delayed delivery on orders. Keeping this in mind, Refresh Ideas feel and advised their clients that starting with cash on delivery is a sign of strength shown by a merchant that they are a serious player. This surly enhances customer trust in their website & company.



It is being observed that out of all the returns orders around 80% of those are returned because of two common reasons:-

- Late delivery of orders

- Wrong product dispatch

So if the eCommerce merchants keep following things in mind, they can successfully ride the wave of COD, and make profit out of it:

NEVER. NEVER over promise on the delivery time. Because the delivery time you put in on the website, is the time when customer expects it to be delivered. Any lapse in schedule will adversely effect your order cancel rate. When a customer orders for a particular occasion, like Diwali, Christmas – he had factored certain things in mind, if your company cannot deliver the ordered product – the customer whole planning or use for that product goes out of gear resulting in cancellations.

If for any reasons any order is delayed. Keep the customer informed even before he enquires about the reasons for delay. It will not only help him understand the problem but also build trust and good reputation for the brand.

When you run an enterprise, your team should be well aware of the fact that you personally do not tolerate the late delivery or wrong order dispatches – at all. Be unreasonable with your team on these grounds, which will pull them towards being vigilant on this process.


Cash on delivery can increase your sales potential substantially, use this as an opportunity for the success of your eCommerce venture. Happy Selling Online!


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