COD vs Prepaid: What's Right For Your Store?

The COD Dilemma

Cash on Delivery (COD) accounts for over 60% of ecommerce orders in India. Customers feel safer — they pay only when they receive the product. But for store owners, COD is expensive. Return-to-origin (RTO) rates on COD orders average 30–40%. That's a shipped product coming back to you, with double the shipping cost and zero revenue.

When COD Makes Sense

New stores with no brand recognition: Customers don't trust you yet. COD lowers the barrier to that first purchase. Once they've received and loved your product, they'll pay prepaid next time.

High-value or first-time customers: The first order from any customer is the highest-risk for them. Offering COD can be the difference between a sale and a bounce.

Tier 2 and Tier 3 cities: Prepaid adoption is lower in smaller cities. COD is often expected.

When to Push Prepaid

Returning customers: They've bought from you before. They trust you. Offer a ₹20–50 prepaid discount to nudge them.

Low-margin products: Your margin on a ₹299 product can't absorb a ₹80 RTO shipping cost. Either disable COD for low-margin SKUs or add a COD fee.

Digital products or subscription services: No physical delivery, so COD doesn't apply.

How to Shift Your COD-to-Prepaid Ratio

OVVEE Settings

In your Admin Panel → Settings → Payment → COD, you can:

Start with both options enabled. Analyse your RTO rate after 30 days and adjust.