Cash on delivery means the customer orders online but pays nothing until the parcel is in their hands. The courier collects the money at the door, in cash or sometimes by card, and passes it back to you a few days later, minus a collection fee. The sale is closed on your site, but the payment happens on the customer's doorstep.

It concerns any seller shipping physical products to a market where people do not trust online payment or simply do not own a card. In Morocco, Egypt, Saudi Arabia, the Gulf, Pakistan and much of sub-Saharan Africa, COD is not an option you add for a few customers. It is the default, and a store that does not offer it loses most of its orders before the checkout even loads.

What is cash on delivery?

Cash on delivery is a payment method in which the settlement of an order is deferred to the moment of physical delivery. The store confirms the order without taking money. The courier acts as a cashier: they hand over the parcel, take the amount printed on the label, and remit it to the seller through the carrier's accounting cycle.

It is not the same as "pay later" or buy-now-pay-later services, where a financial company pays you upfront and takes the credit risk. With COD, nobody has paid until the parcel is accepted. It is also not a bank transfer on receipt. The money moves through the carrier, not directly from customer to seller.

Vocabulary you will meet around COD: "confirmation call" (the phone or WhatsApp call made before shipping to make sure the order is real), "refused parcel" or "return to origin" (the customer does not accept the delivery), "COD fee" or "collection fee" (what the courier charges for handling cash), and "remittance" (the batch payment the carrier sends you for collected amounts).

Why it matters

COD changes the economics of an order in two directions at once. It raises the number of people who buy, and it lowers the share of orders that turn into revenue. You need both numbers to know whether it works for you.

Take a Casablanca brand selling a 350 MAD (about $35) pair of sneakers. With card only, the store converts 0.8% of visitors. With COD added, conversion climbs to 2.4%, three times more orders from the same traffic. That is the upside, and it is real.

Now the downside. Of 100 COD orders shipped, 22 come back refused. Each refused parcel costs the outbound shipping (30 MAD), the return shipping (20 MAD) and a week of a product tied up in transit. That is 22 x 50 MAD = 1,100 MAD of pure loss on 100 orders, plus the collection fee of 2% to 3% on the 78 that were paid. On 78 x 350 MAD = 27,300 MAD collected, a 2.5% fee is 683 MAD. Add the two and COD costs roughly 1,780 MAD per 100 orders, about 6.5% of collected revenue. Still far better than losing two thirds of your orders, but only if the refusal rate stays under control.

How it works

The mechanism is the same whether you ship five parcels a week or five hundred. Step by step:

  • Order placed. The customer fills in name, phone number, address and city, chooses COD, and confirms. No card is entered. Your store records the order as "pending confirmation".
  • Confirmation call. You or a teammate call or message the customer within a few hours. You confirm the product, the size, the address and that they will be home. About 10% to 20% of orders are cancelled at this step, which is cheaper than shipping them.
  • Label and handover. The order is printed with the COD amount and handed to the carrier. In Morocco, that typically means a local courier network with agents in each city rather than a national post office.
  • Delivery attempt. The courier calls the customer, arrives, and collects the cash. A parcel can go through two or three attempts over three to seven days before being marked refused.
  • Remittance. Every week or two, the carrier sends you the sum collected, minus the COD fee and shipping charges. You reconcile the amount against your order list.
  • Returns. Refused parcels come back to you or to the carrier's hub, usually within one to two weeks. You check them and put them back in stock.

Benchmarks and examples

Refusal rates vary more by product and process than by country. Realistic ranges for small sellers:

  • Impulse products under $20 sold from social ads with no confirmation call: 30% to 45% refused. The customer forgot or changed their mind.
  • Fashion and accessories with a confirmation call: 12% to 20% refused.
  • Repeat customers or products ordered after a real conversation (WhatsApp, a DM): 5% to 10%.
  • COD fees in Morocco run from 2% to 4% of the collected amount, sometimes with a floor of 10 to 15 MAD per parcel. In the Gulf, 5 to 15 SAR or AED per parcel is common.
  • Remittance delay: 3 to 15 days depending on the carrier. A brand doing 300 orders a month can have 30,000 MAD in transit at any time, which matters for cash flow.

A creator selling skincare bundles at 280 MAD who calls every customer and ships within 24 hours will typically land at 85% delivered. The same product sold with no call and a four-day preparation delay will land closer to 60%.

Common mistakes

  • Skipping the confirmation call to save time. Every unconfirmed order you ship is a coin toss. The call takes two minutes and saves the cost of a round trip.
  • Not charging for refused parcels in your pricing. If 20% come back, the 80% that get paid must carry that loss. Build it into your margin or your delivery fee.
  • Shipping too slowly. A COD customer's intent decays fast. Two days from order to doorstep is good. Six days doubles refusals.
  • Accepting orders with incomplete phone numbers or vague addresses. "Near the mosque" is not an address. Ask for a landmark and a second phone number.
  • Ignoring reconciliation. Carriers make mistakes. If you never compare the remittance with your order list, missing amounts go unnoticed.

Best practices

  • Call within four hours. Speed matters more than the script. Confirm the size, the address, the price and the delivery window.
  • Use WhatsApp as a second channel. A message with a photo of the product and the total keeps the order in the customer's mind.
  • Set a minimum order for COD. A $10 order with $4 of shipping and a 20% refusal risk does not make money. Require a minimum, or add a small COD fee that you waive above a threshold.
  • Offer a card discount. Give 5% off for online payment. Customers who pay upfront almost never refuse a parcel, and the discount is cheaper than the refusal.
  • Blacklist repeat refusers. Keep a simple list of phone numbers that refused twice. Ask them to prepay next time.
  • Prepare orders the same day. Pack in the evening, hand over in the morning. The parcel reaches most Moroccan cities within 48 hours.
  • Track refusal rate per city and per product. If one city refuses at 40% and the rest at 12%, the problem is the courier in that city, not your customers.

In Roctify

Cash on delivery is available as a payment method on every Roctify plan, including the free one, alongside Stripe and PayPal. Customers pick it at the same one-page checkout as card payment, and the order lands in your dashboard with the phone number and address ready for your confirmation call. Roctify takes no transaction fee on COD orders, so the only cost you carry is the courier's collection fee.

Because stock, orders and customers live in one shared catalog, a COD order reserves the product like any other, and a refused parcel put back in stock is available again on every channel. Multi-currency lets you show prices in dirhams or riyals for your COD markets and in euros or dollars for customers who pay online.

FAQ

Should I offer cash on delivery if I also accept cards?

Yes, if a meaningful share of your customers live in a market where COD is expected. Card-only stores in Morocco or Egypt convert a fraction of what COD stores do. Offer both, and nudge people towards card with a small discount. The mix will shift over time as your customers learn to trust you.

How do I reduce refused parcels?

Confirm every order by phone or WhatsApp within a few hours, ship within 24 hours, and ask for a precise address with a landmark. Those three habits alone typically halve a refusal rate. Then track refusals by product, city and courier so you can fix the one that stands out.

Who pays the shipping on a refused parcel?

You do, in almost every case. The carrier charges the outbound leg and often a reduced return leg, and the customer pays nothing because they never accepted the parcel. This is why refusal rate is the single most important number to watch in a COD business.