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How To Minimize COD Failures And Returns?

Puneet Bhalla

Associate Director - Marketing @ Shiprocket

September 18, 2014

3 min read

eCommerce has given wings to a multitude of businesses. Ever since selling products online has become feasible, the eCommerce industry has resultantly turned into a battlefield. Hundreds of businesses surface in the eCommerce market every day with original concepts to back their odds of finding real-time success. 

Be it a startup or an eCommerce store, the facility of Cash on Delivery lies at the center of all businesses for the end-customers’ maximum ease and satisfaction. However, this facility is often exploited by the end-customers, irrespective of its usefulness. Let’s find out how.

How Is Cash On Delivery (COD) Exploited?

While Cash on Delivery is a great way of enticing your end-customers to buy a product, it is profoundly misused. Many people abuse this facility by randomly ordering high-priced products and simply rejecting them when delivered.

As per a report published in the Times of India, Flipkart customers would order expensive goods “just for fun”, and refuse to accept them upon delivery. This may seem hilarious at first, particularly from the viewpoint of end-customers; it’s a disheartening thing for the sellers. 

For every return (and afterward reattempt), the shipping charge for the sellers gets doubled, trimming the share of their profit and making COD an insecure payment option for them.

Measures To Reduce COD Failures

The reason Cash on Delivery is incorporated in every business is that it is instrumental in expanding the customer base very fast. Many people don’t have the means to do online payments and they rely on COD only. 

Considering the necessity of the facility, we are listing some measures through which you can minimize COD failures to a large extent:

Maximum Purchase Limit

What Flipkart did in the first week of June 2013 was a step to recognize people who genuinely shopped. By creating a maximum purchase limit, Flipkart segregated the legitimate shoppers from the herds of people who didn’t value COD and mocked it so brazenly. Flipkart announced that it was not going to be fulfilling cash on delivery orders of more than 10,000 rupees in certain areas of Uttar Pradesh.

Offers & Incentives On Online Payment

This is an excellent way to confirm the credibility of your end-customers. By giving discounts or gift vouchers to people who prefer doing online payments is a great way to lure the others adhering to COD to switch their means of payment and reap the added benefits. 

Cash On Delivery Only For Select Categories

Using COD on all the product categories doesn’t make a lot of sense. People who order books, beauty, health care products may feel okay about paying on delivery. But for those ordering expensive electronic items such as gadgets, refrigerators, etc don’t need the Cash on Delivery model. 

Minimum Purchase Limit For Availing COD

Since there is an upper limit to avail Cash on Delivery, it is logical to set a lower limit as well. By setting a minimum COD amount, only the genuine shoppers will place orders.

Charge A Small Amount For Cash On Delivery

For a start, a small charge can be levied on COD. By doing this, people opting for Cash on Delivery will constructively shift to making online payments and shed off the extra baggage of COD. 


The relevance of Cash on Delivery is significant and there is no denying it mustn’t be ignored. However, with a few prudent measures, as listed above, you can save yourself from the unnecessary burden of shipping cost and scale up your business the way you intended.

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2 thoughts on “How To Minimize COD Failures And Returns?

  1. I wanted to ask if Shiprocket has a maximum value that can be handled for COD shipments? Some of our shipments are of considerably high value between 25,000 – 40,000. Im not sure if COD is possible for them as i was given to understand courier companies do not handle values beyond Rs. 15,000

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