Cash on delivery vs prepaid: converting Indian shoppers
3 min read · updated
Cash on delivery is still the default for most Indian online orders, but the prepaid share is rising. Data from ClickPost reported in December 2025 put prepaid at 41 percent of orders in 2025, up from 32 percent a year earlier, and lower in smaller cities. For a D2C brand that means keeping COD available while making prepaid the easier and cheaper choice on the page, rather than forcing it and losing the shopper.
How common is cash on delivery in India?
Still the majority. A December 2025 Social Samosa report on ClickPost data, covering orders from January 2024 to November 2025, found prepaid orders rose to 41 percent in 2025 from 32 percent the year before. The prepaid share was 46 percent in metros, 40 percent in tier II cities and 34.5 percent in tier III markets.
Read the other way, most orders outside metros are still paid in cash at the door. A store that removes COD to cut returns may also be removing most of its tier III demand.
Why do shoppers still choose COD?
Trust, mostly. A first order from a brand the shopper has never heard of feels safer when nothing is paid until the parcel arrives. Some shoppers also prefer not to share card or UPI details with an unfamiliar site, and some simply do not want money locked up for a week.
That makes COD a conversion tool as much as a payment method. The question is not whether to offer it but how to keep its costs, mainly orders refused at the door and the logistics fee, under control.
How do you nudge shoppers to prepay without losing them?
Make prepaid the better deal and say so early. A small prepaid discount or a COD handling fee shown on the product page converts more shoppers to prepaid than one revealed at checkout, because nobody likes a total that changes at the last step.
Reduce the risk that prepaid feels like. A clear refund line for prepaid orders, a known payment gateway and a support route that answers on the same day all lower the trust gap that pushed the shopper towards cash in the first place.
- Show the prepaid saving or COD fee next to the price, not only at checkout
- State how and how fast prepaid orders are refunded
- Confirm COD orders by WhatsApp or call before shipping when order value is high
- Keep COD for first orders and nudge repeat customers to prepaid
Should COD be restricted for some orders?
Many brands limit COD by order value or by pin codes with high refusal rates, and that is reasonable when it is based on your own return data. Avoid blanket rules copied from another brand. Refusal rates vary with category and region, and a rule that protects one store can quietly cut another store's conversion in half for a whole state.
Whatever rule you use, test it. Hold back a share of eligible shoppers who see the old payment options, and compare net delivered revenue, not just orders placed.
How can a website adapt the message to each shopper?
A first time visitor on a product page and a returning customer with three past orders need different reassurance. The first needs to know COD is available and returns are easy. The second can be offered the prepaid saving without risk of losing the sale.
IntellQ's agents can show different copy on a slot you marked, such as a payment reassurance line, depending on the visitor's behaviour, with each change approved by you and measured against a control group. A theme with simple rules for new and returning visitors can do a basic version of this as well.
What should you measure when you change payment options?
Orders placed is the wrong number. A change that pushes shoppers to prepay may lower orders slightly and still raise delivered revenue, because fewer parcels come back unpaid. Track delivered orders, refused at door, prepaid share and net revenue per visitor, by city tier where your data allows.
Give any change at least two full weeks outside a sale, and compare with a group of shoppers who saw the old options over the same weeks.
Questions
What share of Indian ecommerce orders are prepaid?
ClickPost data reported by Social Samosa in December 2025 put prepaid at 41 percent of orders in 2025, up from 32 percent in 2024, and lower outside metros.
Does removing COD increase sales?
Usually not. It reduces refused orders but can remove a large share of first time buyers, especially in smaller cities. Test any change against a control group on net delivered revenue.
Is a COD fee better than a prepaid discount?
They work differently. A discount feels like a gift and a fee feels like a penalty, but both shift behaviour. Whichever you use, show it early on the product page so the total never changes at checkout.