Is the CoD option viable for my store? Is it compulsory to offer such a delivery option to the customers? Will I lose customer’s trust by not providing Cash on Delivery of purchases from my store?
There will be many questions like this in your mind when you are launching your ecommerce venture. Every business has a different experience of creating the store & managing orders with the customers. The ecommerce businesses that had a good experience with cash on delivery orders will recommend you to enable this option at your store. In contrast, others are going to deny it.
We know there is a cliche in this topic, but you will not be able to make the right decision unless you are well aware of the pros & cons of this service. We will save you the time of research & list all the valid points to help you decide about the implementation of CoD at your store.
Why Must You Enable Cash On Delivery For Your Ecommerce Store?
- Customer’s choice: One of the most appealing reasons that leave you with no other choice than enabling COD is, customers prefer this mode of payment. Even when shopping online, there are some customers who like to check the products physically. In such a case, the customer can check for the product, look at it &, if satisfied with the quality, make the payment. Else, they can reject the product straight away, without even paying a penny.
- No need for credit/debit card: To make an online payment, you either need a credit card or debit card, net banking service, or now at least UPI. Even when we are following the trend and going digital, your audience might be living in remote areas of the country where debit & credit cards are not used. On the other hand, there can be a situation where your customer has the amount in cash but not getting enough time to go & deposit in your nearest bank or wait for salary to be credited on this weekend. If credit card payment is the only option, your customer will have to wait for the succession of events that will delay it. Now, there are greater chances of your potential customer moving to another ecommerce website providing more options to make the payment. By not enabling COD, you will lose these customers.
- Secure mode of payment: Security of your personal details has always been a huge topic of debate for online as well as offline businesses. Promises are made from ecommerce companies, payment gateways & banks for the secure mode of payment, but everyone talks about 99.99% of user cases. For online payments, 0.1% of insecurity is also significant that can make your customers abandon the products added to their cart. COD promises the delivery of the products ordered online without sharing any of your banking credentials on the web. Now, that’s surely a valid point that must be taken into consideration.
- Improve the count of orders:
COD will allow you to hold the attention of customers who don’t like to make the payment online or afraid of security threats or prefer to play offline only. More payment options will give enough space to customers to choose their preferred mode of payment & improvise your exposure.
List the disadvantages of cash on delivery
- Delayed payment: The payment cycle for cash on delivery orders is a bit delayed compared to that of prepaid orders. If you are a registered seller on marketplaces, you will better understand that you will receive the payment for prepaid orders within seven days of order placement. For COD, it will be seven days after the customer has received the order. Due to this delayed payment cycle, the sellers on marketplaces launch their website to sell on their terms. On your website, it will be your choice that you like to enable or disable the COD mode of payment. However, if you will enable the option of cash on delivery, you will receive the payment as processed by the shipping service provider on the post-delivery of the product.
- Extra charges for COD: Handling cash along with your orders add extra responsibility on the shoulders of courier companies or shipping service providers. If you have a good flow of orders at your store, you can partner with the prominent shipping companies & negotiate on their terms for no extra charges on your COD orders. But, when you are starting your journey as a startup, you have to check with the extra cost that the shipping provider is charging for COD orders. Most often, that additional amount is charged from your customers, but this adds to the overhead cost and again gives the option to your customer to compare your product with that of your competitors before deciding the site on which they like to place an order.
- Loss in returns: COD orders, if returned by the customer, will add to the courier charges &, if damaged in the transit business, have to bear with that loss. Moreover, the customer might take certain additional accessories of your product, if they have opened to check it. Some of the shipping companies will guard you against the transit damage, but none can keep you away from customer fraud cases. We recommend you add these points in your return, refund & shipment policy to safeguard your business against any such cases.
- Customer fraud: As we have mentioned above, the customer may check the product, take something out of it, or simply return the packaging to the courier company. If the shipping handler doesn’t check after taking the product, you will be losing the products for free. The count of such cases will be very low, still, there are chances & that’s why not all companies allow the customer to open order without making payment. You must communicate about such use-cases with your shipping service provider.
- Return delivery charges: When the customer opts for COD, they have an option to reject the order even when it is right at their door or cancel it at any stage of order fulfillment. People love to shop with this freedom & that’s why they prefer COD, but it can bring losses to your business. If you have already packed the product, the initial packaging losses will be used only once the shipping bags are prepared. To change the invoice & add a new shipping label, especially when using POD jacket pouches, you have to bear with the primary loss. In addition to this, you have to bear with the product return shipping cost if shipped already.
We believe this is the fair potion of information that can help you decide whether to enable COD for your store or not. We recommend you to enable COD and add supporting points in your policy pages to safeguard your business. But, ultimately, it’s your choice.
Configuring your store with COD is extremely easy. For easy reference, you can check our user guide & if you get stuck anywhere, you can write to us at support@builderfly.com.
