How are e-commerce companies tackling the challenge of reducing Cash on Delivery (COD) returns, and what strategies are implemented to encourage prepaid orders?

To address the COD return challenge, some e-commerce platforms, including Shopify Gold and Plus stores, are adopting innovative solutions. One approach involves reducing product prices using Shopify Scripts or offering discount codes for customers opting for prepaid options. By leveraging technology and strategic discounting, these platforms aim to reshape customer behavior and enhance the efficiency of transactions, ultimately reducing COD-related risks and promoting a seamless e-commerce experience.

Types of Payment

 

There will be two types of payment for every purchase:

Prepaid orders

Prepaid is a type of transaction in which the recipient makes payment for the goods during the time of purchase through the internet upon check-out.
Prepaid payment will normally reflect as Credit Card/Debit Card, Netbanking, UPI and Digital Wallet.

COD

COD (Cash on Delivery) is a type of transaction in which the recipient makes payment for good at the time of delivery instead of having to pay before receiving the goods (online payment).
This type of transaction usually takes place and allows both the seller and the buyer of the product to minimize the risk of fraud or default.
The purchaser remits payment to the shipping company, which then relays the payment back to the Merchant.

"We strongly believe convenience is the biggest factor to drive adoption for any new form of technology... Currently, less than one percent of all orders on Paytm Mall are cash-based" quoted by Paytm COO Kiran Vasireddy in 2017

Many eCommerce companies want to decrease COD return by offering discounts to the customers on prepaid order.

We have implemented such solution in Shopify Gold or Plus stores where the customer can get the extra discount if they opt for Prepaid options.

We worked on 2 solutions for this.

• Reduce price for each product item and use Shopify Scripts.
• Offer discount code if opt for the prepaid option and hide COD gateway to show discount

Reduce price for each product item and use Shopify Scripts.

1. Create new javascript file named as simply.checkout-script.js in the assets folder and copy code from github.
2. Copy this code to your checkout.liquid file in the layout folder
3. Create new scss file named as simply-checkout-style.scss.liquid in asset folder and copy code from github file
4. Install Shopify script app (https://apps.shopify.com/script-editor)
5. Create new line item script and copy code from this file. 
6. Create 2 settings (checkout_discount_before, checkout_discount_after) in theme setting to get message above gateway.

Offer discount code if opt for the prepaid option

1. Install Shopify script app (https://apps.shopify.com/script-editor)
2. Create discount code PREPAID
3. Show Banner with prepaid discount PREPAID
4. Create new payment script and copy code from this file to hide COD.

 Also read: What Is a Good Conversion Rate for Your Online Business?