When it comes to online shopping, customers expect a fast, convenient, and secure checkout experience. However, limited payment options or complex checkout processes can quickly turn off potential buyers.

Studies show that 6% of shoppers abandon their baskets due to a lack of payment options.

Providing a seamless and hassle-free shopping experience with multiple payment options is key to winning and retaining customers in the competitive world of e-commerce. One way to achieve this is by offering flexible payment options like card payment, digital wallets, manual payment options, etc.

Being one type of manual payment options, Cash on delivery (COD) is crucial for any successful eCommerce business, and its importance cannot be overstated.

In this blog, we’ll take a closer look at how this payment method can improve your customer experience and give your business a competitive edge.

But first, let’s talk about what Cash on Delivery is and how it works.

What is the Cash on Delivery payment method?

Cash on Delivery (COD) is a payment method that allows customers to pay in for their purchase at the time of delivery in cash. When customers pay via COD, they do not need to enter their payment details online; instead, they can pay with cash when they receive the product. This means that, a customer can accept COD if the order virtual.

Cash on delivery (COD) generally refers specifically to payment in cash at the time of delivery, as the name implies. However, some businesses may offer additional in-person payment options as part of their COD service, such as payment by check or money order.

Payment terms of COD. It's ultimately up to the seller to determine what types of in-person payments they are willing to accept as part of their COD service. They may choose to offer only cash payments for simplicity and security reasons, or they may accept other forms of payment as well, such as a payment terminal depending on their business model and customer preferences.

How does Cash on Delivery (COD) work?

The process of Cash on Delivery is simple:

1. Buyer places an order on an online store, and chooses cash on delivery as their payment method on the checkout page.

2. The seller accepts the order on admin panel or with Order on WhatsApp feature, prepares, and ships an item to the customer's address.

3. In exchange for the goods at the time of delivery, the carrier receives cash, a check, or a money order from the buyer and then passes the payment back to the seller.
   
   

It's important for buyers to check the seller's COD payment terms before placing an order to ensure they understand what payment options are available and what is expected at the time of delivery. This can help avoid confusion or delays in receiving the product.

The benefits of Cash on Delivery for Customers

Many customers prefer to pay for their purchases on delivery, which offers several benefits that enhance their overall shopping experience.

Convenience & flexibility

COD offers a convenient payment method that allows customers to pay for their purchases only when they receive their order. Before paying for the order, customers can check the product and make sure everything is perfect.

This is particularly important for customers who are purchasing high-value items or items that are fragile or may easily be damaged during shipping. If there are any issues with the product, such as damage or defects, customers can refuse to pay for it. By allowing customers to inspect the product before making a payment is an ideal way to retain customers and increase satisfaction with your brand.

No dependency on payment cards

Cash on delivery option has the advantage of not requiring digital payments like credit or debit cards. This payment method is especially attractive to customers who may not be comfortable with digital payment methods. People who do not use cards in suburban or rural areas can benefit from the Cash on Delivery payment option.

Once the product is delivered, customers check it, pay, and complete the transaction. The process of paying on delivery is convenient and straightforward for customers.

Increased brand trust and security

One of the primary concerns that customers have when shopping online is payment security. With the rise of online payment fraud and identity theft, many customers are hesitant to provide their credit card information online or use digital payment methods.

Cash on Delivery is a useful payment option that does not require customers to reveal their sensitive information.

With COD, customers have the option to receive products before making the payment, ensuring that they receive what they ordered and reducing the chances of fraudulent activity. This added security can provide customers with peace of mind.

The benefits of Cash on Delivery for online sellers

Beside making customers happy and satisfied with your brand, enabling Cash on Delivery as one of the payment options has many benefits for online sellers as well.

Building trust for brands

Online payments are still risky for many customers, so they may want to prefer a different payment method. Your eCommerce store appears more trustworthy when you offer the Cash on Delivery payment method as you consider the customer's needs, preferences, and their security concerns.

Also, letting customers know that they can inspect the product and pay on delivery can build trust for your brand.

Attracting new customers

Cash on Delivery (COD) attracts new customers who pay in specific ways, such as a smartphone, where card details are not required.

By offering COD as a payment option, businesses can expand their customer base and increase their sales, as they can cater to customers who may not have access to digital payment methods or who may prefer to pay in cash.

Providing clear instructions and communication about the COD process ensures that customers are aware of how it works and what to expect. This can help build customer confidence and trust in the online store, leading to increased customer loyalty and repeat purchases.

Reducing cart abandonment

Ideally, the customer can purchase your product with just one click. In reality, this is not the case.

In the 2018 study, PayPal found that 30% of online shoppers abandon a purchase if their preferred payment method was not available.

Offering Cash on Delivery as an additional payment option can reduce the cart abandonment rates on your online store.

Enhancing user experience

Customers will enjoy a convenient and easy shopping experience with the Cash on Delivery payment option offered in your eCommerce store. Offering customers COD payment option increases their confidence in purchasing.

For customers, knowing that they can pay at the time of delivery, reduces friction at the checkout process and let customers skip the steps.

Ideal for businesses with limited digital payments

Cash on Delivery (COD) can also be beneficial for businesses that operate in areas where access to digital payment methods is limited. By offering COD as a payment option, businesses can expand their customer base and increase their sales. Plus, businesses who enable the Cash on Delivery on the checkout page can reach more customers who may not have access to digital payment methods or who may prefer to pay in cash.

Reducing risks associated with third party payment providers

Cash on Delivery payment method reduces the payment risk for businesses as they receive payment directly from the customer at the time of delivery. This eliminates the need for credit checks, payment processing, and fraud protection measures that can be associated with the third party payment methods.

How Uvodo's Cash on Delivery payment option can benefit eCommerce businesses?

As one of the manual payment options, Uvodo has a built-in Cash on Delivery payment method which you can enable it for the checkout page.

Uvodo's Cash on Delivery (COD) payment method can benefit eCommerce businesses in several ways:

1. Increase sales

2. Increase customer retention rate and loyalty

3. Enhance user experience

4. Provide flexibility and reduce friction

5. Reduce cart abandonment

6. Reduce payment disputes and product refunds

7. Reduce payment risks

8. Lower payment processing costs
   
   

How to enable the Cash on Delivery payment method in your Uvodo store?

Uvodo simplifies the payment process setup by including Cash on Delivery (COD) as a built-in payment method. Additionally, Uvodo provides various online payment gateways, all are integrated into the admin panel at no extra cost to the merchants.

When merchants sign up on Uvodo, COD payment is automatically activated as one of the default payment methods. However, if merchants prefer to keep this payment method enabled, they can simply add COD payment terms according to their preferences.

To set up Cash on Delivery (COD) in your Uvodo store, follow these 3 steps.

Step 1: Login to your Uvodo admin panel or create your Uvodo store.

You can create an online store with Uvodo for free with a yourbrand.uvo.do domain. You can add your custom domain at any time.

Step 2: Navigate to Settings → Payments.

Here, you'll see Uvodo's built-in payment gateways and manual payment methods.

Click on the "Cash on Delivery (COD)" payment method to add the terms and setup the payment fully.

Step 3: On the opened window, write down the payment instructions for COD payment then hit the Save button.

By following these steps, you can quickly and easily enable the COD as a manual payment option.

Increase your sales by enabling Cash on Delivery payment

Overall, cash on delivery payment method is a win-win for both customers and merchants. Customers get the convenience and peace of mind that comes with paying only when they receive their order, while merchants can increase their sales, expand their customer base, and build trust with their customers.

For any eCommerce business that wants to increase sales while maintaining customer happiness, and improve customer experience and loyalty, using Cash on Delivery as a manual payment method is one of the ways to achieve those goals.

If you're running an eCommerce business and looking to increase sales, consider enabling Cash on Delivery payment in your Uvodo store. Cash on Delivery payment method offers various benefits such as:

• increasing customer trust

• reducing payment risk

• improving customer retention

• increasing sales

• lowering payment processing costs

• making your online store more accessible

• attracting more customers
  
  

Sign up to Uvodo to create your free online store and enable various built-in payment methods, including Cash on Delivery to accept payments easily.