COD vs Prepaid Calculator
Order value, COD fee, RTO rate, cost of a failed delivery and your gateway fee → what a COD order and a prepaid order each net you, the gap between them, and the break-even.
Inputs
Editable example. What your courier charges to collect cash, per order.
Editable example. Share of COD orders returned undelivered, from your own data.
Editable example. Forward + return shipping and repacking for one failed delivery.
Typical gateway fee; check your gateway.
Editable example. Prepaid orders rarely RTO, but not never.
Result
Prepaid nets more per order by
₹235.82
₹743.20 COD vs ₹979.02 prepaid, per order placed
Break-even
All defaults are editable examples, not industry averages — put in your own courier’s COD fee, your last month’s RTO rate and your real gateway fee.
What this COD vs prepaid calculator does
It answers one question: per order placed, how much do you actually keep when the buyer chooses cash on delivery versus when they pay online? COD orders carry a flat courier fee and a meaningful chance of return-to-origin, where you lose both shipping legs and collect nothing. Prepaid orders carry a percentage gateway fee and (usually) very few returns. The calculator computes the expected net for each, the difference, the COD RTO rate at which they would be equal, how many extra orders COD would have to bring to justify itself, and the prepaid discount you could afford to offer instead.
COD net = (1 − RTO) × (Value − COD fee) − RTO × RTO loss
Prepaid net = (1 − RTO₍prepaid₎) × Value × (1 − gateway%) − RTO₍prepaid₎ × RTO loss
Break-even COD RTO = (Value − COD fee − Prepaid net) ÷ (Value − COD fee + RTO loss)How to use it
Enter a typical order value
Use your average order value, or run it twice for your cheapest and most expensive products — the answer changes with ticket size.
Enter your courier's COD fee and your RTO rate
Both from your own shipping panel. If you have never shipped COD, start with the examples and come back after 50 orders.
Enter what one RTO costs you
Forward shipping + return shipping + repacking. Couriers usually charge the return leg too.
Enter your gateway fee
Typical gateway fee; check your gateway. Leave prepaid RTO at 0 unless you have seen otherwise.
Worked example
Worked example
Order value ₹999. COD fee ₹40. COD RTO 20%. One RTO costs ₹120. Gateway fee 2%. Prepaid RTO 0%. (Editable examples.)
COD net = 0.80 × (999 − 40) − 0.20 × 120 = 767.20 − 24 = ₹743.20 per order placed.
Prepaid net = 999 × 0.98 = ₹979.02.
Prepaid nets ₹235.82 more per order. Break-even RTO: (999 − 40 − 979.02) ÷ (999 − 40 + 120) is negative, so COD never matches prepaid here — even with zero returns a COD order nets ₹959 against ₹979.02.
To justify COD it must bring 979.02 ÷ 743.20 − 1 = 31.7% more orders. Alternatively, the seller can offer up to ₹240.63 off for paying online and still come out even (999 − 743.20 ÷ 0.98 — slightly more than the ₹235.82 gap, because the 2% gateway fee is charged on the discounted amount) — in practice a ₹50 prepaid discount plus a ₹40 COD charge captures most of the gap.
Reducing COD losses without dropping COD
- ✓Add a COD charge at checkout equal to the courier's fee — buyers who really want COD will pay it; others switch to UPI.
- ✓Confirm COD orders on WhatsApp before shipping. An order confirmed by the buyer RTOs far less often.
- ✓Offer a small prepaid discount, capped at the 'prepaid discount you can afford' figure above.
- ✓Block COD above a value where one RTO would wipe out several orders' profit.
- ✓Use pincode-level data from your courier panel: some areas RTO heavily; make those prepaid-only.
On SitesPlaced the COD charge, a WhatsApp confirmation message from your own number (WhatsApp Business API, on the ₹499 plan) and Shiprocket / Shipmozo pushes are built in. The UPI + COD guide covers the setup; the product pricing calculator shows what the COD fee does to your price.
Frequently asked questions
What is RTO and why does it matter so much for COD?
RTO (return to origin) is a parcel that comes back undelivered — the customer refused it, was unreachable, or changed their mind. On a prepaid order you already have the money; on a COD order you have paid forward shipping, pay return shipping, and collect nothing. That is why a few percentage points of RTO change the COD maths completely.
Where do the default numbers come from?
They are editable examples, not industry averages. Your courier's COD fee is on your rate card, your RTO rate is in last month's shipping panel, and your gateway fee is on your gateway's pricing page. Type those in — the calculator is only as honest as the inputs.
What does 'net per order placed' mean?
The expected amount you keep per order at the moment it is placed, before product cost, averaged across delivered and returned orders. Spreading RTO losses over every order (not just the failed ones) is the only fair way to compare COD with prepaid, where RTO is rare.
Why does the break-even RTO say 'never'?
Because at your inputs the flat COD fee is larger than the gateway's percentage fee, so even a COD order that is always delivered nets less than a prepaid one. COD can still be worth offering if it brings orders you would otherwise not get — the 'extra COD orders needed' line tells you how many.
Should I stop offering COD then?
Not necessarily. Many buyers in India will not pay upfront to a store they have not bought from before. The usual middle path: keep COD, add a small COD charge (the calculator shows the gap), and offer a prepaid discount no bigger than the 'prepaid discount you can afford' figure. On SitesPlaced the COD charge is a single setting on the free plan.
Put this to work on a free online store
Decided on COD, prepaid or both? A free SitesPlaced store lets you offer Razorpay (UPI, cards, net banking) and cash on delivery with an optional COD charge, pushes orders to Shiprocket or Shipmozo, and shows tracking on a Track Order page — all without commission.
Open your free store →₹0 to publish, unlimited products, 0% commission. Razorpay, COD, WhatsApp checkout, Shiprocket and Shipmozo included free. ₹499/month (early-bird; ₹999 after the first 30 stores) adds a custom domain, branding removal, AI copy, analytics, Meta Pixel + CAPI and WhatsApp Business API alerts. See pricing.
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