What Is Cash on Delivery? All You Need to Know
We should agree that Cash on Delivery (COD) is considered to be one of the best solutions that have been tailored in the eCommerce industry, as it can solve several challenges that were impeding the wide-spread of e-commerce around the world.
Despite the increasing number of online shoppers around the world, many are still having concerns about buying online and dealing with online stores.
One of these major concerns is the electronic payment of products through different payment gateways and other payment methods, which makes the shopper asking several questions and get rather confused when shopping online.
💡 You might want to check this list of the top 10 online payment gateways
One of the most important questions about payment methods is: ” Is the store I’m dealing with has a secure online payment system? If the store is really secure, how can I guarantee the product that I paid for electronically? These are only a fraction of concerns that could somehow hinder the continuous progress and spread of online shopping and purchase culture.
To address these concerns, online stores and shoppers gradually opted to rely on COD as a favorable payment method.
Through this article, we will explain in detail everything related to the cash on delivery service, provided by many online stores around the world, as well as describe and review the most important pros and cons of this method.
💡 Have you ever wondered what is a payment gateway and how does it work exactly?
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What Is Cash on Delivery?
Cash on Delivery (COD) is one of the payment methods offered by various stores and online sales sites, especially those in Arab countries, due to the preference of many Arab online shoppers for cash on delivery shopping.
Actually, this payment method constitutes a sub-field called Cash on Delivery E-commerce.
COD means that the shopper can shop through any online store and choose the product they want, and then make the order and choose to pay cash on delivery, which means that the payment process shall be delayed until the customer receives the product he/she has ordered online.
Cash on Delivery service is one of the most important payment methods when online shopping is considered. This method has greatly improved the experience of shoppers, and many online stores around the world have begun to adopt them within their sites as one of the unique methods they offer to their customers.
Advantages of Cash on Delivery Service
Cash on Delivery service has helped to increase the purchase rate from online stores and sales sites around the world, especially in the Arab world, where people prefer this method of payment for their online purchases.
It is offered by many online stores, because it provides more benefits for customers who prefer this method, on top of which are:
- The possibility to shop through various online stores and get the products and services from these sites without having to own any bank accounts or credit cards, whether Visa or MasterCard cards.
- The feeling of confidence and security while shopping through any of the online storesز
- It confirms the purchase order of any product, as the customer will only pay cash on delivery, which in turn encourages many shoppers to practice this experience.
- Additionally, one of the top-rated advantages of COD is protecting the customer’s privacy and information from theft, fraud as well as a security breach, as this payment method does not require any information about the customers’ bank accounts or payment cards.
- The ease of returning the product, in case it is different from the agreed product, or it does not have the same specifications, on which the customer confirmed the purchase order.
- Cash on Delivery also ensures shoppers that the product is available in stores before payment; as sometimes stores, unknowingly, run out of stock, a condition that does not appear on the store’s homepage, due to a technical glitch. This situation causes problems for the customer, as in this case, it requires them to cancel the deal in order to recover their money (in case they made an online payment).
- Most orders and sales on various online stores are made through the COD method.
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Disadvantages of Cash on Delivery
In the previous paragraph, we emphasized that Cash on Delivery as a method of payment for purchases that are confirmed in various online stores, including Souq and Jumia, carries many advantages, for all shoppers and sometimes for merchants on these online sales sites. Nevertheless, this method carries some minor disadvantages, though these can be remedied anyway.
💡 You might want to check this list of the top 10 online payment gateways, part 2.
Here are some of the disadvantages:
- The customer may incur extra charges if choose to pay cash on delivery, as there are some websites and online stores charge extra fees for this method.
- There is no COD payment in many online stores that attract more customers and shoppers.
- The arrival of the ordered product is delayed in many cases, because the customer sometimes wishes to pay upon arrival, only via a credit card, but it happens that the shipping agent may forget the Point of Sale (POS) machine or it is malfunctioning, which disrupts the acceptance of the product.
- Many of e-commerce experts and leaders see Cash on Delivery as the biggest stumbling block to eCommerce. Many of them claim that this method lacks an important and essential link, i.e., online payment. They argue that this payment method prevents the completion of an integrated e-commerce process, as all agree with the well-known concept of e-commerce that every practice within the process must be done electronically through the Internet.
💡 A side note: Cash on delivery e-commerce (or cash on delivery shopping) is so common in the Arab world that we frequently encounter the statement “cash on delivery online shopping” on almost every online and/or physical stores, such as Souq.com and Carrefoure.
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Cash on Delivery is one of the payment methods for purchases that many online stores made available to all customers on their sites, because of the many advantages, and features that this payment method has.
One of the most important advantages of COD is the increase in the number of online shoppers, increased online purchases from online sites and online stores, thereby increasing the spread of e-commerce worldwide.
Through this article, we talked about the concept of COD as one of the distinctive payment methods offered by most online stores, especially in the Arab world, which has the largest percentage of shoppers who prefer pay cash on delivery service, as well as the pros and cons of this method and how any customer can choose it, in various online stores that offer that way of paying.