Cash on Delivery – Steps to reduce the rejection rate.


The eCommerce industry is caught between the devil and the deep sea, with respect to COD.


The number of online shopping sites opting for COD option is on the increase. So, simultaneously there has been an increase of the reject rate. The reject rates vary from 20% to 40%.

The high rejection rates, are affecting the bottom-line of the the shopping sites.


What can be reason for the high reject rates of Orders in COD?


  1. The consumer has noticed a better alternative on other shopping sites.

  2. The gap between the Order Booking and the Order Delivery is large.

  3. The consumer is not serious about the purchase, and could be just playing a prank.


All big shopping sites, conform the order with the customer before the final despatch. In case the consumer does not attend to the call, or calls up the Customer Care, to conform the order, the purchase order is canceled. This reduces the rejection rate to some extent, but still does not guarantee that the final payment will be made.


Of the above 3 reasons, the danger is from the 3rd category. So the industry is trying to find out a range of economical solutions, to weed out such cases.


a) The industry players are pooling data, to arrive at identifiable patterns,

b) Email-id’s, Mobile numbers, Delivery addresses are being compared to arrive at the pattern.

  1. The purchase limit for COD is being brought down.



Patterns have to be arrived and identified patterns have to implemented online for successful reduction of the reduction rates. Genuine customers should not be rejected.


Few online sites are rejecting the Purchase Orders based on the delivery pin-code. This is typical of the credit card industry, wherein application from specified Postal pin-codes were not encouraged.


Another option is the Prepaid Cards/mobile wallet option. The prepaid card number has to be keyed at the time of Checkout. The payment can be made at the time of delivery via the Prepaid card. Yes,for this to be successful, the delivery boys should be equipped with Mobile POS terminals.

Ah, another potential stream for Safe ePayments!!!

 The Prepaid card number can be verified at the time of checkout and if the number of previous rejects is more than the permissible limits, the Purchase Order can be rejected.

 Of course, the Online Sites, should employ trained Risk assessors, for instant online decisions I.e to accept or reject the Purchase Order.


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