What is a COD payment?
Cash on Delivery (COD) is a payment method where the customer pays for the product upon its delivery. COD is a popular payment method in many countries, especially in regions where customers are wary of making online payments or do not have access to credit/debit cards.
With COD, the customer does not have to pay for the product before delivery. Instead, they will make the payment when the product is delivered and checked for quality. This guarantees that customers will receive their orders without risking any fraud or credit card information being exposed to third parties.
Cash on delivery still somewhat popular in Europe
In comparison to other parts of the world like Asia and the Middle East, paying on deliver is not most popular payment method in most European countries. However, there are a few exceptions. In Greece and Romania, for example, over 50% of online transactions are made using COD. Meanwhile, in Italy and Portugal, approximately 30% of transactions are made through this payment method.
Offering cash on delivery as a payment option can help expand your customer base, especially in areas where online payments are uncommon or customers are hesitant to use them. Using this can help online businesses (whether it e-commerce marketplace or another sort of platform) enter new markets and increase their sales.
Impact of COD on shopping habbits
Cash on Delivery can significantly influence how customers make purchases online and impact their shopping habits. See how this can impact your online store.
Increase customer trust
There are many reasons why your customers want to pay with cash upon delivery. Firstly, it helps increase customer trust as it eliminates the need to provide credit/debit card details online, which can help to reduce concerns about online fraud and identity theft. This option enables customers to receive the product before paying. With COD, they have the opportunity to inspect the product before making the payment. This can reduce the chances of product returns and increase customer satisfaction with online purchases.
For some customers, paying for a product only after it has been delivered can provide also a sense of control over the whole transaction, as they can choose to reject the product if it does not meet their expectations This can lead to more repeat customers and increased customer loyalty.
More impulse buying
Research shows that using COD (cash on delivery) as a payment option for online businesses can increase the likelihood of a successful sale and decrease the number of abandoned carts. Paying upon delivery can also lead to more impulse buying, as customers can order products without worrying about immediate payment. They can simply place an order and worry about the payment later. This can make them more likely to add extra items to their cart and may end up purchasing more items than they originally intended.
Potentially higher return rates
Some customers may make purchases without giving full consideration to their decision which could result in higher rates of returns. However, as you already know, providing the option of cash on delivery can give you a competitive edge and can be a strategic way to increase the value of orders. Ultimately it is up to you to determine what is best for your sales. Professional logistics partner like E-Log Service will help you to avoid most common challenges when implementing reverse logistics in e-commerce and reduce the costs and workload required to introduce this payment option for your e-commerce business.
