COD or prepaid for Diwali orders? How to offer cash on delivery safely

TL;DR

• • Keep COD for buyers ordering for themselves.
• • Add a small COD charge, so paying online costs less.
• • Prepaid only for gifts to another address, personalised items, fresh food and big orders.
• • Confirm on WhatsApp before you pack a COD order from a new buyer.
• • Leave order limits on, and mark delivered orders as delivered so real buyers aren’t stopped.
• • After your order-by date, think about switching COD off until the rush is over.

Why buyers ask for cash on delivery

• They don’t know you yet. Paying a new shop in advance feels like a risk. Paying at the door doesn’t.
• They are afraid it will arrive late. Before a festival, a buyer thinks: if it comes after Diwali, at least I haven’t paid. That is the same thought that leads to a refused parcel.
• It is a habit. Some buyers simply prefer to pay when they can see the box.

So switching COD off entirely will cost you some orders. We have no figure for how many, and it differs from shop to shop. The aim is to keep those buyers and lose the refusals.

Why refusals hurt more in peak season

When a COD parcel is refused, or nobody answers the door, the courier brings it back to you. Couriers call this RTO, return to origin. You usually pay for both journeys, and you collect nothing. In the festive weeks, three more things go wrong:

• The stock comes back too late. A parcel that leaves you in late October can return after Diwali. Diyas and festive hampers then wait a year or go on clearance. Sweets are thrown away.
• Gifts meet the wrong person. The buyer ordered a hamper for an aunt in another city. The aunt is asked for ₹1,200 at the door for a parcel she didn’t order. She says no.
• Couriers are busy. Parcels can take longer in the rush. A buyer who has waited may buy elsewhere and refuse yours when it arrives. Ask your courier how long delivery takes at this time of year.

What it costs, as a worked example

These are round numbers for illustration. Use your own. Say you sell a décor set for ₹1,200. It costs you ₹600 to make, ₹40 to pack and ₹80 to deliver.

• • Paid online: the payment company takes a small fee. We use 2%, which is ₹24. You keep ₹456.
• • COD, delivered: the courier charges for collecting cash. We use ₹40. You keep ₹440.
• • COD, refused: you have paid ₹40 for packing, ₹80 to send it and ₹80 to bring it back. You are ₹200 down, and the set is back on your shelf, perhaps after the festival.

Worked example. The refusal counts are made up to show the sum; they are not averages. Check your courier’s rate card and your own order list.

Two things stand out. Halving the refusals (from two to one) is worth more than the COD charge. And the two together bring a COD order close to a prepaid one. That is why the rest of this guide is about confirming orders first and charging second. To run your own numbers, use the free COD vs prepaid calculator.

Which orders should be COD, and which prepaid

An honest limit: on SitesPlaced, cash on delivery is one switch for the whole store. There is no setting that turns COD off for a single product, or for orders above a certain value. So for prepaid-only items, do it by hand:

• Say it where the buyer decides. Write “Prepaid orders only” in the first line of the product description, and add it as a custom product badge on that product.
• Catch it in the order. If a COD order arrives for that item, open the order, tap the WhatsApp button, and send your UPI details. Make or ship it once the money is in.
• If most of your range is gifts or made to order, switch COD off for the season: untick Show Cash on Delivery under Settings → Checkout → Order methods. You can tick it again in a second.

1. Add an extra charge for COD

A small charge does two jobs. It pays for part of what refusals cost you, and it gives buyers who can pay online a reason to do so. A fair way to set it: take what refused parcels cost you and spread it over all your COD orders. In the example above, two refusals at ₹200 each across ten orders is ₹40 an order.

On SitesPlaced: open Settings → Checkout → Order methods and fill in Extra COD charge. It is shown next to the cash on delivery option at checkout, added to the total only when the buyer picks COD, and printed as its own line on the invoice. Online and WhatsApp orders are never charged it. It is free on every plan.

On the eleven brand-style templates and the General Store, the line under the buy button can say that cash on delivery is available and how much the buyer saves by paying online. The Premium, Simple Fashion, Grocery and Astrology templates don’t have that line, so say it in your announcement bar. To take online payments, connect your own Razorpay, PhonePe or Cashfree account: see how to accept UPI payments on your website.

2. Leave the order limits on, and know their numbers

Placing a COD order costs the buyer nothing, so junk orders are nearly always COD. On SitesPlaced, Spam & abuse protection sits under Settings → Checkout and is already on for every store, on every plan:

• • Orders per customer per day: 5, counted across the same phone number or email.
• • Unpaid COD orders at once: 3 per buyer. Buyers who pay online are not affected.
• • Orders per hour from one device: 15.

You can change each number, and 0 switches that one limit off. A buyer who is stopped sees one line: “We couldn’t place this order. Please contact the store directly.”

Two Diwali cautions. First, a real buyer sending gifts to four relatives may place four COD orders in an evening, and the fourth will be stopped. That is one more reason to ask gift buyers to pay online. Second, a COD order counts as open until you mark it delivered or cancel it. Update your Orders tab every evening, or a loyal customer’s next order will be refused.

When someone refuses a parcel or places junk orders, open that order and press Block customer. It blocks that phone number and email from ordering again, and they are never told. The block list and limits don’t cover Razorpay Magic Checkout or Shiprocket Checkout (both on the Growth plan), where the buyer types their details in that company’s window.

3. Confirm COD orders on WhatsApp

This is the step we would do first, because it finds the wrong numbers, the second thoughts and the gifts before you pack anything. In the festive weeks, confirm every COD order from a first-time buyer, and every order above a value you choose.

Ship when you get a YES. If there is no reply, send one reminder the next day, then cancel the order so the stock goes back on sale. The line about paying at the door matters most for gifts.

On SitesPlaced: every order has a WhatsApp button in its Customer box, which opens a chat with that buyer. On the Growth plan (₹499/month), the WhatsApp Business API sends an order confirmation from your own business number by itself when an order is placed. More wording is in Diwali WhatsApp messages for customers.

4. Get the address right

Some parcels come back because the courier couldn’t find the door. Under Settings → Checkout → Checkout form fields, tick Show on Landmark, which is off by default. It adds a box for something like “opposite the temple gate”, and the landmark travels with the address to the courier. Keep the phone number required. For gifts, switch on Order Notes in the same card and ask for the receiver’s phone number there, since the courier will call the person at that address.

5. After your order-by date

Parcels sent in the last days before Diwali are the ones most at risk of arriving late, and a late festive parcel is the one a buyer has the least reason to accept. Once your order-by date has passed, consider unticking Show Cash on Delivery until the rush is over, and say in the announcement bar that new orders arrive after Diwali. If you stop shipping altogether for a few days, Settings → Checkout → Pause ordering stops all new orders and shows your own message. Both are free. The order of jobs for the whole season is in the Diwali 2026 checklist.

The settings in one table

You could take COD orders in Instagram DMs instead, and many sellers do. But a DM has no order limit, no block list and no record of who refused last time. A free SitesPlaced store keeps all three, with 0% commission, unlimited orders, and UPI and cards through your own Razorpay, PhonePe or Cashfree account.

From Starter (₹199/month) you also get your own domain and store pages that answer about 4× faster than on the free plan: about 75 ms instead of about 330 ms, measured on live paid stores on 28 September 2026. “Answer” means how soon the page starts arriving on the phone, before the photos load. The code FREE7 gives 7 days free on Starter or Growth when you set up autopay; cancel before the first charge and you pay nothing. For the year-round method, read how to reduce RTO and fake COD orders. The week-by-week festive plan is on the Diwali page.

Frequently asked questions