Why customers still choose COD

E-commerce in India has matured. Customers are shopping across categories, paying digitally, and getting orders delivered to remote towns in days.

But one thing hasn’t moved as fast: prepaid adoption.

Despite the availability of UPI, credit cards, wallets, and BNPL, Cash on Delivery (COD) still dominates a large chunk of orders—especially in Tier 2, 3, and beyond.

And that’s not just a checkout issue. It’s a trust issue.

When customers choose COD, they’re not saying, “I don’t have digital payments.”

They’re saying, “I’m not sure I trust you yet.”

For brands, this isn't just a UX challenge. It's a deeper signal—about perception, assurance, and post-purchase anxiety. And unless you address it holistically, no amount of COD-blocking or prepaid incentives will solve it.

Let’s break down what’s really happening here—and what your brand can do about it.

COD is not a payment preference. It’s a behavioural default.

Ask most e-commerce operators and they’ll tell you: “We’ve made prepaid easy. But customers still prefer COD.”

This often gets misread as a tech or infrastructure gap. But the real issue isn’t access. It’s mindset.

COD is deeply ingrained in Indian e-commerce behaviour because it offers a feeling of control in a low-trust ecosystem:

• The product might not match the image

• Delivery might be late

• Refunds might take weeks

• There’s no one to talk to if something goes wrong

In that context, COD becomes the risk-free way to transact:“Let me check it before I pay for it.” It’s not about convenience. It’s about safety. And the only way to shift this behaviour is to make prepaid feel safer than COD -not just cheaper.

For Customers,
Prepaid = Commitment. But COD = Safety Net.

From the customer’s perspective, prepaid carries friction points that rarely get addressed in full:

• What happens if the product is damaged or wrong?

• How fast is the refund, really?

• Who handles support—and do they respond?

These questions rarely get clear answers on most e-commerce sites. Instead, they see a ₹50 prepaid discount and a “no returns on discounted items” disclaimer.

So they opt for COD.

And they’re not wrong for doing so. Their behaviour is shaped by experience—not ignorance. If you want them to behave differently, you need to design differently.

What brands miss out on

Most brands think they’re doing enough to encourage prepaid:

• Offering small discounts

• Simplifying payment flows

• Defaulting to prepaid at checkout

But these nudges fail when the underlying perception of risk isn’t addressed. Prepaid drop-off isn’t caused by friction, it’s caused by fear.

• The fear of paying for something that arrives late, broken, or not at all

• The fear of getting stuck in a 10-day refund cycle

• The fear of not being able to return what you don’t like

Until brands fix the experience after the payment, the conversion before the payment won’t shift.

Its all about the brand trust.

Here’s the real cost of persistent COD reliance:

• You can’t build meaningful retention.

  COD customers are less likely to repeat, less likely to trust, and harder to re-engage.
  
  

• Your unit economics suffer.

  RTO eats your margins. Inventory gets stuck. Cash flow slows down.
  
  

• Your brand never levels up.

  If customers don’t feel safe paying you upfront, you stay in “unproven” territory—no matter how big your catalog gets.

This is the blind spot. You’re not just losing prepaid revenue. You’re losing the perception of being a brand worth committing to.

And customers don’t change that perception because of a coupon code. They change it because their experience proves otherwise.

So, what can you actually do about It?

This isn’t about finding a hack. It’s about designing a better default.A customer choosing prepaid over COD is a signal. A leap of trust. And that trust has to be earned through consistency, clarity, and protection that’s built into the process, not bolted on.

Here’s where to start:

1. Make your refund policy unmissable

Not buried in the footer. Not hidden behind legalese. Front and centre. Clear language. Transparent timelines. No asterisks.

“If it’s damaged, we’ll replace it.”
“If you cancel, you’ll get your money back in 48 hours.”

This sounds basic. But most brands still make this hard to find. And customers notice.

2. Charge a shipping fee for COD orders

Not to punish. But to reflect real cost. ₹30–₹50 is enough to prompt reconsideration.

It tells customers: “COD is available. But prepaid helps us keep things faster and cleaner.”

It nudges without forcing. And over time, it works.

3. Offer partial COD

Some customers need a little more assurance before going all-in on prepaid.

Offering partial COD—where they pay a small deposit upfront and the rest on delivery—creates a middle path.

It keeps risk low for your business while slowly training comfort with prepaid behaviour.

4. Incentivise prepaid the right way

• Discounts help. But value matters more.

• The goal isn’t to bribe a behaviour shift. It’s to reward the trust a customer is showing.

• Customers are more likely to prepay when it comes with tangible benefits:

• Faster shipping

• Easy, free returns

• Cash-back or loyalty rewards

• Access to priority support

Make prepaid feel like the smart, valued choice—not just the cheaper one.

5. Protect your margins, not just the customer

COD isn't just a customer convenience—it’s a margin liability. From fake orders to avoidable returns, every failed COD delivery hits your bottom line hard.

That’s where protection matters—not for the buyer, but for your business. We’re building that at Zimple - protection backed by intelligence. So you can flag risky orders, reduce RTOs, and move toward prepaid adoption without hurting experience.

It’s not about offering less. It’s about protecting what matters more.

Final Thought

Incentives nudge. UX improves ease. But what really shifts COD behaviour is trust—earned, not assumed. Customers aren’t clinging to COD because they’re outdated. They’re holding on because it’s the only option that feels safe. When you de-risk that journey- through clear refunds, smarter defaults, and protection that works quietly in the background - you don’t have to push prepaid. Customers start choosing it.

Make prepaid easier, yes- but also smarter, more rewarding, and visibly safer. Because when trust is built into the flow, your customers don’t need a backup plan. And your business doesn’t need to lose money proving it’s trustworthy.

Here’s how we can help

If your team is thinking about how to transition away from COD-heavy behaviour, without hurting trust or growth-this is a conversation worth having.

We’re building Zimple to help e-commerce brands reduce losses, protect margins, and make prepaid an easy, confident choice.

Let’s talk.