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Cash on Delivery (COD), how this payment method change customers purchase behaviour

The number of eCommerce & customers is increasing day by day. People are more comfortable than before buying their essential goods from an online store. Simultaneously, the payment method is one of the major concerns during online purchases. This is because there are fraud people too at online just as offline.

So cash on delivery is reliable to them considering the benefit. In fact, most of the orders are placed as cash on delivery(COD) method.

How does cash on delivery(COD) work?

In cash on delivery method customers pay product prices during the last stage of order fulfilment rather than an advance payment. Another name of this method is collect on delivery. While a product price is not paid or undelivered then it returns to the seller.

Why cash on delivery are the customers choice?

Most of the customers prefer cash on delivery than advance payment since there are a few benefits of it. Those are as follows:

Easier payment option:

When you are a customer, you have to pay only when you received the product. So there is no risk of losing money if any seller doesn’t deliver the product. Even you can return the product while the product is defective and you can save your money from being stuck at any online shop.

No payment card dependency:

One of the major benefits of cash on delivery is no debit or credit cards are required to buy a product. Most of the people living in the village area don’t have any cards. During delivery, you receive the product and check then pay the price. Just a simple method.

Secure transaction:

Once you are paying through any payment gateway few of the financial information such as credit card, or bank account info pass to the payment gateway & seller.


What are the benefit from seller end?

Achieve Customer Loyalty: 

When an order is placed on eCommerce on cash on delivery method and not asking for payment before order completion then customers trust your brand. They get an assurance that your business is focused on order fulfillment in the future it may turn to users to pay in advance.

Boost Customer reach:

Since cash on delivery is considered as the safest payment method to the customer, therefore, any eCommere that offers this payment method will increase audience or potential customer.

More order Completion rates:

Among the customer, it’s a common mindset that they don’t want to spend money before they get the product in their hand. Cart abandon issue also appears due to advance payment in a few cases. Therefore when you offer cash on the delivery method the number of order completion rates increase.

Impulse Purchase increase:

These days people buy products on the go. They don’t have much time to do that. In cash on delivery method, it takes short time to complete the order.  But advance payment takes a few extra steps and time at the checkout process. So impulse purchases at COD increase more than an advance payment.

Free Advertising & get potential buyers:

After a successful purchase of an order, a satisfied customer becomes a fan of your store. It is more likely that they will introduce your brand to their family or friends. Forbes says that any loyal customer prefers to buy again 5 times more & referring a friend are 4 times more to the store. Ultimately online stores gain potential buyers.

Final Words

During this Covid-19 online shopping has risen more than ever. Where cash on delivery plays an essential role to boost the whole process. The safest & smooth transaction made it customer’s choice on order.

Therefore it’s an opportunity for both the buyers & sellers to buy and sell products using Cash On Delivery (COD).

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