Cash on Delivery: Shopify Business Strategy for India

Online shopping is a part of our lives. Whether it’s for a birthday gift or household goods, cash on delivery has become the preferred payment method for many shoppers. But what exactly is cash on delivery? How can it help your Shopify business? In this blog post, we will answer these questions and more!

Cash on delivery or COD is a payment method wherein an online shopper chooses to pay for a purchase at the time of order fulfillment instead of paying for it in advance. It’s commonly known as COD. So, if a product is undelivered or not paid for, it gets returned to the brand/merchant – this is called RTO or Return to Origin.

cash on delivery
RTO is a big challenge for Shopify e-commerce businesses but there are ways to reduce it. This blog post covers more on reducing RTO.

Cash on delivery is a great way for Shopify businesses to improve cash flow and manage their cash more efficiently. In addition, cash on delivery allows shoppers the opportunity of shopping even if they don’t have enough money upfront or are unwilling to share financial information online –which makes it especially popular among people who live in rural areas or tier three cities in India.

Advantages of Offering Cash on Delivery for India

Cash on delivery is a popular cash management option for several reasons including:

–  Offering cash on delivery gives your business greater ability to manage cash flow in the short term. This means you can have money earlier which will help with cash flow problems and budgeting issues. It also ensures that funds are available when they’re needed, so you’ll never have to worry about cash flow concerns during large, seasonal sales.

–  It gives you more flexibility in your cash management system because it allows you to ship goods before receiving payment for them. This means there is less of a need for an expensive credit policy since the risk of bad debt is lower.

– Cash on delivery is a cash management solution that is growing in popularity for Indian online shoppers. According to the Reserve Bank of India, cash on delivery has become one of the most preferred payment methods among Indian consumers because it allows them to make purchases without disclosing their personal financial information online.

–  Offering cash on delivery makes your products accessible and gives you more opportunities to reach a wider audience.

Disadvantages of Cash on Delivery for Shoppers in India

While cash on delivery is a popular cash management solution, it can be difficult to offer as well as manage since there are disadvantages that shoppers need to consider before choosing cash on delivery.  

–  Cash on delivery purchases may cost more than regular online transactions. It’s important that you explain cash on delivery fees to your customers so they know what they’re getting into before placing an order. Most of the Shopify businesses will charge customers Rs 50 extra for COD orders, to tackle RTO.

– Since cash on delivery purchases are cash-only transactions, the Shopify eCommerce merchant is unable to accept payment for products after they’ve been delivered. This means that if something goes wrong with a cash-on-delivery purchase such as undelivered goods or buyer’s remorse, it can be difficult and even impossible to get paid.

–  It also makes it hard to track cash flow since cash on delivery is not an upfront payment method.

Tips for Managing Cash Flow with Cash on Delivery Business Strategies in India

If you’re looking to implement cash management strategies that will help your business manage cash more effectively, offering cash on delivery may be a great place to start. Here are some tips for managing cash using this kind of cash management strategy:

– Offer cash on delivery for large ticket items such as furniture and appliances. This allows you to have funds available when it’s time to process a return or exchange which can help reduce the risk of bad debt since shoppers will be more likely to pay in cash if they know there is a way that they can get their cash back if they’re not satisfied with a purchase.

–  Offer cash on delivery for goods that are large and may be difficult to bring into your store or warehouse, such as appliances or furniture. This will help reduce shipping costs since the product won’t have to fit in standard shipping containers, which means you can ship it at lower costs to your customers.

– Implement cash on delivery payment options for seasonal sales, which will help you manage cash flow more effectively throughout the year and save money in large shipping costs during times of high demand when it’s difficult to bring products into your warehouse or store.


Cash on delivery is a cash management solution that can help you manage cash more effectively and increase sales. It’s important to understand the advantages and disadvantages of cash on delivery before choosing it as your cash management strategy so that both you and your customers are satisfied with their purchase decisions.

Overall cash on delivery is a great way for Shopify eCommerce stores to increase conversion rates, improve cash flow and manage their cash more efficiently. What are you waiting for? Start accepting cash on delivery on your Shopify store today!