For a long time, COD reigned supreme. Businesses were content to receive the payment after product or service delivery. Of course, COD makes companies susceptible to fake orders or scammers who have no intention of paying for anything, as well as customers who refuse to pay if they’re dissatisfied with their orders.
When credit cards entered the picture, credit card companies made a case for themselves by offering incentives to companies that prioritise credit card payments. In fact, some companies even stopped allowing COD payments altogether in favour of credit cards.
Is the Time of COD Payments Over?
Today, it sometimes feels like people live on the internet. People are online several hours a day, doing their work, selling and even studying digitally.
Shopping is, of course, no different.
Our emphasis on convenience and saving time, as well as the benefits credit cards promise, have gotten a lot of us caught up with swiping or using our cards for making payments. Hence, some people who aren’t big fans of COD predict its inevitable demise.
Still, that way of thinking could be a bit premature. Why?
Because COD continues to provide suppliers and customers benefits that cannot be equalled by other payment alternatives.
Benefits of Cash on Delivery for Suppliers
The online shopping industry is poised to enjoy continuous growth in the years to come; but does this signal the eventual demise of COD as a mode of payment? Not really, especially if you examine the following benefits of COD for suppliers.
1. You increase your market reach.
While it makes perfect business sense to allow credit card payments for online transactions and purchases in general, restricting payments to credit cards can inevitably narrow down your customers’ choices.
Besides, just because a lot of people have credit cards doesn’t mean everyone does. So, by keeping COD as one of your payment options, even customers who don’t have credit cards can order from you.
2. You retain customers at little to no cost.
COD is incredibly simple, and this is reflected in how it works. With COD, there’s no need to create and maintain a huge customer database.
Customers today are also concerned with data safety and privacy — and for good reason. So with COD, there’s no large, complicated database to worry about. As long as you provide quality products and services, your customers will keep coming back for more.
3. You can attract more buyers.
It may be hard to believe for some, but continuing to offer COD can help attract more customers. Especially now that customers are wary of newcomers and unverified or unreviewed merchants and suppliers, they turn to COD payments as a way to build trust and rapport with new or unfamiliar businesses.
4. You can use it as a customer retention tool.
Getting new customers can sometimes be difficult, depending on the nature of your business. However, once that hurdle is overcome, the next challenge is customer retention.
When you offer COD as a payment option, it indicates to customers that you’re being upfront and are trustworthy, ready to face the consequences of customer dissatisfaction. In turn, this creates a favourable impression of your brand, which also builds trust and helps with customer retention.
Benefits of Cash on Delivery for Customers
Even with the availability of credit cards, cash apps, PayPal and other modes of payment, some customers still choose COD for the following reasons:
1. It enables smooth, simple online transactions.
When a customer chooses the COD option, they do away with complicated processes and the need to enter bank account details or CVV numbers, authentication codes and so on. This is especially helpful to customers who aren’t digitally savvy.
2. It reduces buyer’s stress.
Opting for cash on delivery saves customers from needlessly worrying when delivery gets delayed. Also, some customers time their orders, so even if they don’t have the cash to pay for the item now, they can still proceed to check out. This is very useful when ordering items with a limited quantity.
By choosing COD, all the customer has to ensure is they have the payment ready once the items are dispatched.
3. It makes the returns process easier.
Although this may be a risk businesses face, COD makes the product return process easier and eliminates the need for refunds. When the delivery is made and the customer is unhappy with the product, they can simply withhold payment and ask the courier to return the product.
4. It is a secure payment option.
Compared to online transactions that are open to scammers and at risk of being hacked, COD is a very secure payment method. There’s no need to leave banking or credit card data on the internet, so your financial details remain safe.
Now, even when it seems that COD payments may someday become relics of the past, we think it’s here to stay, especially because of the benefits it provides suppliers and customers.
