Cash on Delivery: Pros and Cons

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Ever since the advent of e-commerce, businesses have been trying to make the online shopping experience as convenient as possible for customers. A big part of this is offering various delivery options, and one popular option is cash on delivery (COD).

However, COD is not without its drawbacks. In this video, we’ll take a look at the pros and cons of COD so you can decide if it’s the right option for your business. So if you’re wondering, “should I offer cash on delivery?” keep watching to find out more.

What is Cash on Delivery?

Cash on delivery (COD) is a payment method where customers can pay for their orders with cash when the order is delivered. This contrasts with other payment methods like credit cards or PayPal, where customers pay for their orders before the product is shipped.

COD is arguably the most convenient payment method for customers, as they don’t have to worry about making a payment online. However, it can be riskier for businesses, as there’s always the possibility that customers will refuse to pay when the order is delivered.

Pros of Cash on Delivery

There are several advantages to offering COD as a payment option, let’s take a look at some of them:

1. Customer satisfaction:

As we mentioned, COD is a very convenient payment method for customers. By offering COD, you’re making it easier for them to shop from your store and this can lead to increased customer satisfaction.

2. No risk of chargebacks:

With other payment methods like credit cards, there’s always the risk of customers initiating a chargeback. This is when they contact their credit card company and claim that they didn’t receive the product they ordered, or that it was not as described. If the chargeback is approved, the customer will get their money back and you’ll be out of pocket. With COD, there’s no risk of chargebacks as customers have to pay for their orders when they’re received.

3. Less chance of fraud:

COD can also help to reduce fraud, as customers are less likely to place orders for products they don’t intend to pay for when they have to pay in cash. With other payment methods, it’s more accessible for customers to commit fraud by using a stolen credit card or PayPal account.

Cons of Cash on Delivery

So now that we’ve looked at the pros of COD, let’s take a look at some of the drawbacks:

  1. Increased costs:

    Offering COD can increase your shipping costs as you’ll have to pay for the extra insurance and handling required. You may also have to pay higher fees to your shipping company if you offer COD. This means that COD may not be the most cost-effective option for your business, especially if you’re starting.

  2. Greater chance of losses:

    If the customer decides to return the product, you’ll have to bear the cost of shipping it back to your warehouse. This can lead to increased losses for your business, especially if you’re selling products that are easily damaged or broken.


So there you have it! These are the pros and cons of cash on delivery. As you can see, there are both advantages and disadvantages to offering COD as a payment option. You’ll need to weigh these factors and decide if COD is right for your business. Thanks for watching!

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