Ecommerce & COD in India
E-commerce in India is driven by the COD facility it offers. You are reducing the market size if you are offering only prepaid options.
So, if you want to sell anything in India, a COD facility is mandatory for good returns on the advertisement money spent.
This post lets us learn how to reduce Cash On Delivery problems step-by-step.
The chart below(Source: IAMAI/Deloitte) shows the COD consumption in India. It’s a whopping 45% of the total e-commerce orders. So, there is no way you can deny COD to your customers.
The COD orders received should be appropriately followed when the order hits the dashboard.
If this work is done meticulously, we can change the COD into a lucrative option to lure customers into buying more.
It will increase your ROI on the advertisement money spent.
We can look at Cash On Delivery problems in two ways: the priority is getting as many prepaid orders as possible, and the second is reducing COD Returns.
Make The Customers Pay
It is the priority. Try to get as many prepaid orders as possible. Use all or a combination of the following.
Step: 1 – Make The Website Trusted
It is not about adding a 100% secure payment logo to the footer.
Make the website truly secure with https and the right payment gateway.
Use proper UI/UX, navigation flow, and font/color/logo to communicate the brand’s trustworthiness.
Show customer support numbers and encourage customers to contact us for any queries.
Step: 2 – Give a Generous Return Policy
The customer expects a second option if their purchase goes wrong.
So it is natural to give that chance if you expect one to trust you with a purchase.
Give your terms associated with it, but give a generous return policy and highlight the same on the product page.
Step: 3 – Explain cash on delivery is not available
Give an irresistible offer to pay them via the prepaid option.
Do this on the checkout page, where the customer chooses between no COD and only prepaid or COD.
The offer should outweigh the benefits of COD; it needn’t be an upright cash discount.
It can be a cash back for future orders, an extended warranty, free delivery, a freebie, etc.
Step: 4 – Charge for COD
Do not overdo this to the level it hurts your conversions. Charge a nominal fee for providing cash on delivery option.
Try to educate the customer that the cash-on-delivery option comes with a cost and ask the customer to support going cashless.
Step: 5 – Convert COD to Prepaid
After receiving COD orders, it is not it. Send a link for your COD customers immediately after receiving the order with a 5% discount to pay online.
It will convert a percentage of your COD orders into prepaid ones.
Remember to keep a timeline for a few hours and start processing orders because delayed dispatch will result in more COD returns.
COD Confirmation
After all your efforts, if the customer wants to get the delivery via COD, follow the below to do a smooth delivery.
Faster delivery and smoother communication about order confirmation dispatch details enable customers to trust the product more and accept the order.
What’s more, collect the cash like a Pro!
Step: 6 – Call The Customer
Do this every single time, especially for high-value orders.
Check and confirm the products, size/color chosen, and address details, including landmark and address type. Do not call via automated voice calling immediately after placing the order.
Call them yourself or with the help of a call center after 1-2 hours of placing the order.
Step: 7 – Faster Dispatch
Customers are more and more expecting offline retail buying experiences online. They want the product in their hands when the order is placed.
Mention the maximum dispatch and delivery times on the product page and the website.
Do the dispatch well before the mentioned time to be in the customers’ good books. In Dropshipping, It is the responsibility of the manufacturer.
You should ensure it happens and support them with proper addresses, product details, design files, and all relevant details to get it shipped.
Step: 8 – Check History
Check the history of the customer. Few customers may repeatedly order high-value items and ignore delivery.
If you feel no genuine reasons behind repeated order cancellations, cancel the order immediately.
Step: 9 – Give Live Updates
Customers expect to be informed about all the backend processes at your end.
You may simplify the process and keep informing the customer via SMS or email with statuses like Printed, Packed, Dispatched, Reached your local hub, Out of Delivery, etc.
It will act as a reminder, and the customer will keep the cash ready and in the mindset to accept the product when it finally arrives.
Step: 10 – Re-Attempt
Customers may not be available at the location or not pick up calls.
Wait for a while and communicate with him via WhatsApp or email to get his convenient time and location for the delivery.
Then, arrange the same by coordinating with the courier partner for smooth delivery.
Also, coordinate with your dropship company with detailed information to do a re-attempt of delivery.
Step: 11 – Pay with A Card
Some courier companies are offering a pay-with-card option.
It is a win-win situation for courier companies, customers, and brands like yours.
Customers will only pay when they are receiving the product.
Customers need not have cash in hand during delivery as well.
Conclusion
Make enough efforts to minimize the COD orders in the first place.
After receiving COD orders, make meticulous efforts to get them delivered. It will highly reduce the COD returns.
You must understand that COD Returns exist and are part and parcel of the E-Commerce Business experience in India and eCommerce shipping strategies.
Keeping these small returns after enough efforts in the product cost should eliminate the COD returns effect in our business.
Frequently Asked Questions
What are the common challenges associated with Cash on Delivery (COD) as a payment method in e-commerce?
E-commerce businesses face several challenges with cash-on-delivery (COD), including higher return rates, delayed payments, and increased operational costs.
How does COD affect a business's cash flow and financial management?
COD can impact cash flow and financial management as businesses must bear the cost of goods sold and shipping before receiving payment.
What are the security concerns and risks related to COD transactions, and how can they be mitigated?
To mitigate security concerns and risks associated with COD transactions, businesses can use reliable courier partners and verify customer details to prevent fraud, theft, and non-delivery.
What strategies can e-commerce businesses use to minimize instances of fraudulent COD orders?
To reduce instances of fraudulent COD orders, e-commerce businesses can implement measures such as verifying customer details, using fraud detection tools, and limiting COD orders for first-time customers.
With over 10+ years of experience in the industry, Our founder has dedicated his career to helping brands achieve exponential growth through innovative print-on-demand solutions.
