Tag Archives: Cash on Delivery

Cash on Delivery – India’s Gift to Amazon

 

            The Cash on Delivery is not a payment option in any Amazon eCommerce site, except India.

            In December 2013, through a tie up with India Post, Amazon added the Cash On Delivery payment method to its Payment Options.

            The model has been so successful that Amazon is planning to roll-out similar services in China and Japan. Yes, you have read it right, Amazon will offer Cash on Delivery in China and Japan.

            As an introductory offer, there is no additional service fee for Cash of Delivery.             Cash on Delivery is not yet available for all pin codes. This is due to limitations of courier services we use. However, in near future the same would be available for  all Indian Pin codes

The present Terms & Conditions of Cash on Delivery as displayed on the companies’ website are as under:

  • The payment option of Cash on Delivery is available only for all orders Fulfilled by Amazon and for certain Seller fulfilled orders.
  • Cash on Delivery can be used as payment method only for orders less than   50,000. The order value limit could be lower depending on the pin code of your address.
  • Convenience fees of   39 will be charged on orders placed using Cash on Delivery. However, for a limited period, no convenience fees will be charged on any orders placed using Cash on Delivery.
  • Cash on Delivery cannot be used to pay for orders containing a mix of seller fulfilled items and items Fulfilled by Amazon.
  • The order amount has to be paid in full before receiving the package and signing the delivery sheet. The package can be opened only after the payment is made.
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Will Indian eCommerce buyers encourage CBD (Cash before Delivery) ?

Shopclues.com and Suvidhaa join hands to explore the opposite of Cash on Delivery (COD).

The strike rate of COD options for Indian eCommerce companies is 40% due to a high rejection rate. The rejection rate could be delay in receipt of the goods or change of mind.

As cash is still the preferred option in Tier II and Tier III cities, one Indian eCommerce company encouraged its collection team to brainstorm and come up with an innovative idea.

The idea rolled out was the CBD (Cash before Delivery). In simple terms CBD is the opposite of COD.

Under CBD physical cash has to be handed over at Suvidhaa’s outlets to Shopclues.

The order is shipped only on the receipt of the physical cash.

CBD has been rolled out as per paper articles, but it not yet activated in Shopclues website.

To ensure a high-conversion rate for CBD orders, Shopclues must first make sure that there is Suvidhaa outlet within 1-3kms radius of the buyer’s residence/workplace

Snapdeal – Launch of TrustPay –New tool to boost ePayments

Snapdeal – Launch of TrustPay –New tool to boost ePayments

Early this month, media was agog with news articles that eBay INC has joined has joined Snapdeal as an investor.

After 3 weeks of such news, one of eBay’s trust tool to keep up consumer interest in its site i.e PaisaPay, was launched in an Indianised avatar i,e TrustPay (note ‘Pay’ is common in both the brand names.

In simple terms, TrustPay works like an escrow agreement. The payment is released to the Seller only when the Buyer conforms the receipt of the goods as per his/her specifications.

The conformation has to be done online at Snapdeal website. Of course, if no such conformation (positive or negative) is made within 7 days of Product Delivery, Snapdeal will assume that all is fine. This clause seems fair; as otherwise, the seller will have to wait for an indefinite period to receive his/her money.

However, TrustPay will work only when physical goods are involved. It is not yet clear, what will be the status of deals booked for services. The major complaints are in the services related deals, as it is very difficult to understand where the mistake lies, the seller or the buyer.

As a Safe ePayments motivator, TrustPay promises to attract more traction to ecommerce sites.  However, in the long run, the Cash On Delivery (COD) option should be withdrawn for true 100% ecommerce. Of course, there is no harm in hybrid models, as long the consumer benefits.

 

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.