Cash on delivery on Shopify in India: setup and fake-order safeguards

Many shoppers in India prefer to pay when the parcel arrives, especially the first time they buy from a brand they don’t know yet. Offering cash on delivery (COD) can make that first order easier. It also brings its own problems: fake orders, parcels that come back, and money that arrives later than you’d like.

Here’s how COD works on a Shopify store, and how to set it up so it helps more than it hurts.

How COD works on Shopify

Shopify treats cash on delivery as a manual payment method (opens in a new tab). You switch it on in your payment settings, and customers can choose it at checkout. The order comes in marked as unpaid, and it’s marked as paid once the money is collected.

For stores in India, Shopify also offers a free app called Advanced Cash on Delivery. It lets you offer COD only in certain PIN codes or for orders within a price range, add an extra charge for COD orders, and show shoppers on the product page whether COD is available where they live.

One cost point worth knowing: Shopify’s extra fee for outside payment providers applies to orders paid online, not to manual methods like COD. Your shipping partner will usually charge a COD fee, though.

COD order forms

Many Indian stores add a COD order form: a short form on the product page where the shopper enters their name, phone number and address and places the order in one step, without going through the full checkout. These are provided by apps.

They make ordering quicker, which is the point. They also make it quicker to place an order you never intend to accept, which brings us to the main problem.

The fake order problem

When a COD parcel is refused or the customer can’t be reached, it goes back to you. This is called RTO, short for “return to origin”. You usually pay shipping both ways, the stock is stuck in transit for days, and sometimes the product comes back damaged. A few of these a week can wipe out the profit on many good orders.

Safeguards that help:

• OTP verification. The shopper confirms their phone number with a one-time code before the order goes through. It filters out wrong numbers and careless orders.
• Limits on repeat orders. Rate limiting stops the same person or device from placing a flood of orders in a short time.
• Order confirmation on WhatsApp. A message right after the order gives the customer a chance to confirm, and gives you a reason to hold the parcel if they don’t.
• Rules by PIN code and order value. If certain areas or very high-value orders return often, you can offer prepaid only for them.
• A small COD charge or a prepaid incentive. A modest difference in price nudges people who were going to pay anyway to pay online.

When the money arrives

With COD, the courier collects the cash and your shipping partner passes it on to you on a schedule, after deducting their charges. That gap affects your cash flow, so ask your shipping partner about their remittance cycle before you choose them. Our guide to shipping for Indian Shopify stores covers what else to ask.

How we set it up

On the stores we build, COD order forms, OTP verification and other safeguards against spam and fake orders, and WhatsApp order notifications are part of the standard build. We set up COD alongside the online payment options you’re approved for, then test both before launch.

What to take from it

• COD can make a first order easier, but plan for returned parcels from day one.
• Shopify’s Advanced Cash on Delivery app controls where and when COD is offered.
• OTP checks, confirmations and order limits cut down fake orders.
• Ask your shipping partner how and when COD money reaches you.

If fake COD orders are already a problem on your store, tell us what’s happening.