Cash on Delivery in India: How to Avoid High Return Rates

Following on in our weekly Cash on Delivery (COD) in depth guide – this week we’re talking about avoiding high return rates and how affiliates can mitigate this in their marketing strategies.

We all know that the COD industry is booming as a favourite payment method in India, accounting for a substantial portion of online transactions.

COD gives customers the comfort of paying only when their order arrives, making it particularly popular in regions where trust in online payments is still growing. But for e-commerce businesses and affiliates, COD can lead to high return rates, which eat into profits, disrupt supply chains, and waste resources.

Why do customers return COD orders at such a high rate? What can affiliates and brands do to reduce this? Here, we’ll explore why COD returns are common and some practical strategies to reduce them.

Why can COD goods, returns – be so high?

Several factors contribute to the high return rates on COD orders in India:

1. Impulse Buying: COD makes it easy for customers to place orders on a whim since there’s no upfront financial commitment. Without a down payment, customers may feel less obligation to follow through.
2. Trust Issues: Many customers in India are still cautious about online shopping. With unfamiliar brands, they may fear poor quality or authenticity and feel safer refusing the product on delivery.
3. Multiple Orders: Some customers place the same order on multiple sites to compare delivery speed or quality. Once they receive an item, they may cancel duplicates.
4. Fit and Size Problems: For apparel and footwear, fit issues are common, leading customers to order multiple sizes or styles, only to return the ones that don’t fit.
5. Delayed Delivery: Long delivery times increase the chance of cancellations. Customers may lose interest in the product or find it elsewhere before it arrives.

How to reduce COD return rates

Now that we understand why COD returns are high, here are some strategies to help minimize them.

• 1. Provide detailed product information upfront in your reviews or content
  Clear, detailed product descriptions and high-quality images can help customers know exactly what they’re buying. This reduces the chance of them being surprised – or disappointed – by the product’s appearance, size, or quality upon delivery.
  Tip: For apparel and size-sensitive products, include a detailed size chart, and consider adding user reviews that mention fit and quality.
• 2. Use partial COD payments
  Implementing a small advance payment for COD orders can act as a commitment from the customer.
  For instance, asking customers to pay a nominal amount upfront, with the remainder on delivery, can reduce impulse buys and make them more likely to accept the product.

  Tip: Offering a “COD with Advance Payment” option reassures customers and helps them feel more invested in the purchase.

• 3. Send order confirmations and delivery reminders
  Many COD returns happen simply because customers forget they placed an order. By sending order confirmations and delivery reminders, you can keep the order fresh in their mind and reduce the likelihood of them refusing the delivery.
  Tip: SMS reminders are effective in India, where mobile usage is high. Send a reminder the day before delivery to confirm the order and check the customer’s availability.
• 4. Improve size and fit guides
  For products like clothing and footwear, which often see high return rates due to fit issues, providing detailed size guides and fit recommendations can make a big difference. The more information customers have upfront, the less likely they are to order multiple sizes or return items that don’t fit.
  Tip: Include a “size recommendation” tool or suggest popular sizes based on past purchases or customer feedback to help customers choose the right size.
• 5. Leverage predictive analytics to flag High-Risk orders
  Predictive analytics can help identify COD orders that are at high risk of return. By analyzing factors like customer location, order history, and return behavior, businesses can flag high-risk orders and take preventive measures, like requiring a small advance payment or confirming the order with a call.
  Tip: Work with your analytics team to identify trends in high-risk orders and implement extra verification for those cases.
• 6. Limit COD on High-Risk products
  For certain product types, like luxury items or high-value electronics, COD return rates are often higher. Limiting COD availability on high-risk items or applying it to lower-priced items can reduce the chances of costly returns.
  Tip: Offer COD on products below a specific price threshold or exclude certain high-risk products from COD entirely.
• 7. Improve delivery speed
  Long delivery times can lead to increased cancellations. When customers wait too long, they may lose interest or find the product elsewhere. By improving delivery times, you reduce the gap between order placement and arrival, keeping customers engaged with their purchase.
  Tip: Work with logistics partners to optimize last-mile delivery or consider offering same-day delivery in areas where feasible.

The benefits of lower COD return rates

Reducing COD return rates positively impacts your bottom line. Not only does it save on logistics costs and time, but it also helps streamline your operations. Lower return rates mean better resource allocation, enabling your business to offer COD with reduced risk and higher profitability.

Final thoughts

COD remains a crucial payment method in India, bridging trust gaps and enabling more customers to shop online confidently.

While high return rates are a common challenge, they’re far from inevitable. By implementing these strategies – from clearer product information to predictive analytics and delivery improvements – businesses can mitigate return rates and make COD a more profitable option.

Reducing COD returns requires effort but pays off by enhancing customer satisfaction, improving profitability, and creating a smoother experience for all parties involved. COD may come with challenges, but with the right approach, these challenges can be managed effectively.

With these insights, you’re now better equipped to navigate the complexities of COD in India. Here’s to smoother transactions and happier customers in your affiliate journey.

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