Offer both, with rules. Cash on delivery (COD) helps customers who don’t know your shop yet, and prepaid (UPI, card, net banking) protects you from parcels that come back. The trick is to keep COD for the orders where it makes sense, and make it easy to choose prepaid for the rest.
What COD gives you, and what it costs
COD lowers the first-order worry: the customer pays only when the parcel is in their hands. For a shop people found on Instagram, that can be the difference between an order and a “maybe later”.
The cost is risk. A refused or unreachable COD parcel still costs you shipping both ways, and the stock is stuck in transit. Cash also has to be collected and settled.
What prepaid gives you
Prepaid orders are paid before you pack, so a refused parcel doesn’t cost you the product. With UPI most customers can pay in seconds. The catch: a customer who doesn’t trust you yet may not pay at all.
Four rules that make COD safer
- Set a COD limit. Allow COD only up to an order value you’re comfortable risking. Bigger orders are prepaid.
- Add a small COD fee. It covers part of the cost of COD and nudges customers towards prepaid without forbidding COD.
- Ask the customer to confirm. Before you pack, the customer confirms the COD order with one tap. Pack only confirmed orders.
- Turn COD off for certain items. Personalised and made-to-order pieces can’t be resold if refused; take prepaid or an advance for those.
When to ask for an advance
For made-to-order work and food, an advance works well: the customer pays part of the amount online when ordering, and the rest on delivery. You aren’t left with a custom piece nobody pays for, and the customer doesn’t pay everything upfront.
Make prepaid the easy choice
- Accept UPI, cards and net banking on the same checkout.
- Offer UPI straight to your own ID if you prefer: customers pay and enter the UPI reference, and you check it against your bank.
- Show delivery charges at checkout, so there are no surprises.
- Send order updates on WhatsApp, so prepaid customers feel looked after.
A simple starting setup
- Ready-stock items under your COD limit: COD (confirmed) or prepaid.
- Orders above your COD limit: prepaid.
- Made-to-order and food: an advance, and the balance on delivery.
- Personalised items: prepaid.
Review it after a month: if refused COD parcels keep coming back for one kind of product, lower the limit or turn COD off for it.
Set it up in your shop
COD limits, a COD fee, one-tap COD confirmation, advances, UPI to your own ID and online payments through Razorpay, Cashfree, PhonePe or PayU are all part of payments. See how it works for the whole order journey.