What Exactly is Cash on Delivery?

Pay cash on delivery service, also known as COD, means payment on product delivery. While most people prefer paying money at the time of delivery, one can also go for online payment modes powered by cards or UPI.

Why do Shoppers Prefer COD?

While the Digital India campaign is on the rise, you might find it surprising that payments through debit cards, credit cards, e-wallets or net banking still contribute up to 30% of all payments. That means more than the majority of the people still prefer cash delivery. But why? Let’s find out:

• Fear is one of the foremost factors. India is a money-conscious society. Therefore, people still fear being scammed during online shopping and prefer paying cash upon delivery.
• Delivery for cash is still the predominant and most convenient payment method. It provides ease of payment; you need to pick out money from your wallet and pay upon delivery.
• Most people feel that post-purchase order transactions are stressful. This includes refund delays, non-receipt of refund, refunds not allowed by the concerned merchants etc. However, in the case of delivery with cash payment, if you want to cancel a transaction, then you can do so without extra stress.
• Some people want to ensure they receive the correct product before spending money. After receiving the delivery, they open up and check the product before making the payment. If the product is not as per their needs, they can outright return it and deny the payment.
• Many people don’t know how to make online payments. Therefore, they pay cash on delivery to avoid wrongful costs.
• You may not have a bank account, debit, or credit card to make an online payment. Therefore, your only option is to take delivery and pay cash.

In a Nutshell

The above reasons clearly show why COD dominates the online shopping payment space. However, to further encourage your customers to pay online, you need an efficient payment gateway that allows them to transact successfully in one go. PayU allows your customers to pay with 150+ payment modes, thus ensuring that payment convenience is no hassle for your business. So, start accepting payments with PayU now!

FAQs

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What is COD, and How Exactly Does it Work?

Cash on delivery is a system where the customer transfers funds to the business only after they have received the product. It is worth noting that this form of payment generally holds suitable for non-perishable goods. That said, here’s a step-by-step breakdown of the backed process involved- 

1. First, a customer places an order online via a catalogue made available by the business on a cash on delivery shopping website. 

2. Next, once the customer receives the shipment, they may choose between paying immediately or, in some cases paying within a stipulated time frame in case they decide to keep the item. 

3. In the cash on delivery shopping business, if the customer decides not to keep the item, the item is returned, and the expenses involved in logistics are borne by the organisation.

4. However, if the customer is happy with their products and decides to keep them, they will pay for them. 

These steps ideally hold true in case the customer opts to shop from cash on delivery shopping apps as well. 

Is Cash On Delivery a Good or Bad Thing?

Although something being good or bad is a matter of perspective, it certainly helps to assess its pros and cons. If you are a business considering shifting into a cash-on-delivery shopping model, then here are a few sets of pros and cons to help you decide –

Advantages of cash on delivery shopping

• The COD method is the best for consumers who want to try new products but are afraid of risks. As in this, they can try products from new businesses and pay for them only when they receive the order and are satisfied with them. Hence, for small businesses looking to make an impression, COD is definitely one way to go.

• One more perk with cash on delivery shopping method is that customers can make multiple orders and then pay for the ones they want to keep. For example, if a customer is confused about the quality of two products, they can order both and see which one is better when delivered.

• There is no possibility of online payment fraud in the COD method. Although the likeliness of online fraud happening in legitimate businesses is low, it might happen in some of the new businesses.

• The COD method would lead to an improved customer experience overall, as they get a better sense of your offering. Hence, placing the business in a position where more and more people will know about it.

• Cash on delivery shopping method frees the customer from electronic payment methods. So even if a person is living in a rural area and doesn’t have a credit or a debit card, they can buy products from the online shop. 

Disadvantages of cash on delivery shopping

• If multiple customers choose to purchase items in bulk for the sake of trying and choosing a perfect product, then your business will run low on inventory. And if the customer decides not to keep them, the chances are that you will lose the customer who is willing to buy the product because you are out of stock.

• This pseudo stockout may create problems for other newer customers looking to purchase your product.

• Cash on delivery shopping is a definite risk for sellers, as they usually tend to send goods without the guarantee that they’ll be paid for them. 

• Cash on delivery shopping may also create issues with cash flow. That is, there tends to be a delay in receiving the cash that the business could have potentially gotten and invested.

Cash on Delivery Shopping Sites in India

There are several sites in India that offer the COD method as a way of payment. And we have compiled a list of significant cash on delivery shopping sites in India where you can try selling your products – 

1. Flipkart
2. Amazon
3. Myntra
4. Ajio
5. Bigbasket
6. Meesho

This list is not exhaustive but rather indicates that it is still a popular mode of payment.

Final Thoughts 

Cash on delivery shopping allows the customers to purchase the products of their liking without the fear of getting frauded by an online company. Now you can buy a product that caught your eye while scrolling through Instagram or Facebook and pay for it when the delivery is done. It saves you the risk while giving you a chance to bring the accessories you like to your home.

FAQs

The post Cash on Delivery Shopping- A Guide for Businesses appeared first on PayU Blog.