Guide · 28 August 2026

How to offer cash on delivery on your ecommerce website

COD is how most of India still buys online, and it is also how a lot of stores quietly lose money. Here is how to run it without that happening.

Offer COD, charge a small fee for it, and watch your RTO rate like it is the only number that matters — because on a COD store it very nearly is. A refused delivery costs you both courier legs plus packaging on an order you were never paid for, which is why a 20% RTO rate can erase the margin on the 80% that landed.

TL;DR

• COD is not optional in India. Removing it removes a large share of your buyers.
• Charge a small COD fee. It nudges buyers toward prepaid and covers some of the RTO cost.
• RTO is the number that decides profitability, not conversion rate.
• Confirm high-value COD orders on WhatsApp before you ship them.
• COD needs no payment gateway at all — you can start selling today.

Why you cannot just skip COD

A large share of Indian online shoppers still prefer cash on delivery, and for first-time buyers on a store they have never heard of, it is often the only thing they will consider. Removing COD does not convert those buyers to prepaid. It converts them to somebody else's store.

The useful framing is that COD is a trust instrument. The buyer is not attached to cash; they are unwilling to pay a stranger in advance. Anything that builds trust — real photos, a working phone number, reviews, a proper policy page — moves some of them to prepaid. COD covers the rest until you have earned it.

Charge a COD fee, and say why

A small COD fee — commonly ₹30 to ₹75 — does two jobs. It offsets part of what COD genuinely costs you, and more importantly it makes prepaid visibly cheaper at the moment of choosing, which nudges a real share of buyers across.

Show it as a line item rather than burying it in the product price. Buyers accept a stated handling charge; they resent discovering a price that changed. On SitesPlaced the COD charge is a setting under Settings → Checkout, and it appears on the checkout, the order and the invoice automatically.

RTO is the number that matters

Return-to-origin is a delivery the customer refuses. You pay the outbound courier charge, the return charge, and the packaging — on an order that produced no revenue at all.

Work it out for your own store rather than trusting a benchmark. If a ₹600 order carries ₹120 of round-trip courier plus ₹30 of packaging, every RTO costs you ₹150. At a 20% RTO rate, twenty of every hundred orders each cost you ₹150 — which comes straight out of the margin on the eighty that landed.

• Confirm high-value COD orders with a WhatsApp message before shipping. A single reply filters out a surprising share of the ones that were never going to be accepted.
• Set a COD limit. Above a certain order value, prepaid only. The RTO cost on a large COD order is not worth the conversion.
• Use RTO scoring if your checkout offers it. Both hosted checkouts on SitesPlaced score COD orders for risk.
• Watch which pincodes cause it. RTO is not evenly spread, and a handful of areas usually account for a lot of it.

The accounting part nobody mentions

With COD, the courier collects the cash and remits it to you later — typically a week or more after delivery. That is a real working-capital gap: you have paid for the stock, the packaging and the courier before you see any of the money.

It also means your store shows an order as delivered while the money has not arrived. Keep those two ideas separate in your own bookkeeping, or you will over-estimate what you have.

This is why a COD order stays marked unpaid in a well-built store even after delivery — because it is unpaid, from your point of view, until the courier remits.

You do not need a gateway to start

This is the practical takeaway if you are just starting. COD and WhatsApp checkout need no payment gateway, no KYC and no approval from anyone. You can publish a store today and take orders this afternoon.

Add a gateway when you have one — Razorpay, PhonePe or Cashfree, all free on every SitesPlaced plan — and then let the COD fee do the work of moving people to prepaid.

If you do not have the website yet

Everything above assumes you already have a store to put cash on delivery on.

A SitesPlaced store is free to build and publish, with 0% commission on every sale, on every plan, and 21 integrations included rather than sold as add-ons. You can import a catalogue straight from Instagram instead of typing products in one at a time.

COD, WhatsApp checkout and every payment gateway are on the free plan. Step-by-step: checkout options.

Frequently asked questions

Should I offer cash on delivery at all?

In India, almost certainly yes. A large share of shoppers, especially first-time buyers on an unfamiliar store, will not pay in advance. Removing COD does not make them pay by UPI — it makes them buy elsewhere.

How much should I charge as a COD fee?

Commonly ₹30 to ₹75. It offsets part of what COD costs you and makes prepaid visibly cheaper at the moment of choosing, which moves a real share of buyers across. Show it as a line item rather than hiding it in the price.

What is RTO and why does everyone go on about it?

Return-to-origin is a refused delivery. You pay both courier legs plus packaging on an order that earned nothing. At a 20% RTO rate those losses eat the margin on the orders that did land, which is why it matters more than conversion rate on a COD store.

How do I reduce RTO?

Confirm high-value orders on WhatsApp before shipping, set a COD limit above which you require prepaid, use RTO scoring if your checkout offers it, and watch which pincodes are responsible — it is rarely evenly spread.