Cash on delivery (COD) is a payment method where the customer pays for an online order when the parcel arrives, usually in cash to the courier, instead of paying at checkout. The store ships first and collects later, so the shopper takes no risk, and the store carries the risk of fake orders and refused parcels.
Free planSet up in about 1 minuteInstall on Shopify(opens in a new tab)
This guide is for Shopify merchants who sell, or plan to sell, with COD. It covers how a COD order works, where COD is common, the pros and cons, how to turn it on in Shopify and how to keep fake orders out. Cartsaver is a Built for Shopify app by Xtnd that confirms cash on delivery orders on WhatsApp or SMS before you ship, then uses the same WhatsApp conversation for order updates, abandoned cart recovery, one-tap cross-sells, reviews and campaigns, through the official WhatsApp Business API.
What does COD mean in e-commerce?
In e-commerce, COD stands for cash on delivery: the order is placed online, but the money changes hands at the door. Some couriers also accept a card or a mobile wallet at delivery, which is still called COD because payment happens on delivery, not at checkout. You will also see it written as “cash on delivery”, “collect on delivery” or “pay on delivery”.
For the store, a COD order is an unpaid order until the courier hands over the cash. In Shopify it shows as payment pending until you mark it as paid.
How does cash on delivery work, step by step?
The customer picks cash on delivery at checkout, the store confirms and ships the order, the courier collects the payment at the door, and the courier pays the store, minus its fees, on its settlement schedule. If the customer refuses the parcel, it goes back to the store.
- The customer chooses COD at checkout. They enter a name, phone number and address, and pay nothing.
- The store checks the order. Many COD stores confirm the order with the customer first, by phone call or, faster, with a WhatsApp message the customer confirms with one tap.
- The store packs and hands the parcel to a courier, with the amount to collect on the waybill.
- The courier delivers and collects the payment in cash, or by card or wallet if the courier supports it.
- The courier settles with the store. It transfers the collected cash, usually minus a COD or collection fee, on a schedule agreed with the store.
- The store marks the order as paid in Shopify once the money arrives.
If the customer is unreachable or refuses the parcel at step 4, the courier returns it to the store. This is called RTO (return to origin), and the store usually pays shipping both ways.
Which countries use cash on delivery the most?
Cash on delivery is common wherever many shoppers have no card, don’t trust paying a store they don’t know, or simply prefer to see the product first. That includes Egypt, Saudi Arabia, the UAE, Kuwait and the rest of the Gulf, Morocco and the Maghreb, India, Pakistan, Bangladesh, Indonesia, the Philippines and Vietnam, as well as many African and Latin American markets.
The share of COD in each country changes fast as cards and wallets spread, and published figures vary a lot from source to source, so check recent data for the market you sell to. What stays true is the pattern: in these markets, a store without COD loses buyers who would have ordered, and a store with COD has to manage refusals and fake orders. For Egypt specifically, see cash on delivery in Egypt: best practices for Shopify stores.
Why do stores offer cash on delivery?
Stores offer COD because it wins orders from shoppers who would not pay online: first-time buyers, people without cards and anyone who wants to see the product before paying. In COD-heavy markets it is often expected, and an online-only checkout loses those sales.
What are the pros and cons of cash on delivery?
| Advantages | Disadvantages | |
|---|---|---|
| For the merchant | More orders from new and card-less buyers; trust for a new or small brand; no card payment fees on COD orders | Fake and impulse orders; refused parcels and return shipping (RTO); cash arrives days later; courier COD fees; cash handling and reconciliation |
| For the shopper | No card needed; no risk of paying for a parcel that never comes; can inspect the product before paying (where the courier allows it) | Must have the exact amount ready; must be home at delivery; refunds after delivery can be slower |
What are the risks of cash on delivery for merchants?
The main risks are fake orders, refused deliveries and cash handling. A COD order costs the buyer nothing to place, so wrong numbers, pranks, duplicates and change-of-mind orders reach your courier, and each refused parcel costs you shipping both ways and blocks stock.
- Fake orders: made-up names or phone numbers, pranks, competitors and bots. The order looks real until the courier can’t find anyone.
- Refusals and RTO: real buyers who changed their mind, ordered from two stores or are not home. Read how to reduce RTO on Shopify COD orders.
- Cash handling: money sits with the courier until settlement, and you have to reconcile what was collected against what was delivered.
- Tied-up stock: an item packed for a fake order can’t be sold to a real one until it comes back.
How do you set up cash on delivery on Shopify?
Shopify treats COD as a manual payment method. In the Shopify admin go to Settings, then Payments, add the cash on delivery manual payment method, write any additional details and payment instructions, and activate it. COD orders then arrive as payment pending until you mark them as paid.
- In the Shopify admin, go to Settings > Payments.
- Under the manual payment methods, choose Cash on Delivery (COD).
- In Additional details, add what the customer sees next to the method at checkout, such as a COD fee or delivery areas.
- In Payment instructions, tell customers how to pay at the door. Check the details with your courier.
- Activate the payment method.
A few things to know, from the Shopify Help Center: orders paid with a manual method show as unpaid (payment pending) on the Orders page, and you mark each one as paid once you receive the money; Shopify charges no third-party transaction fees on manual payments; and if Shopify manages your US sales tax, you need to switch US sales tax to self-directed before you can accept manual payments.
Shopify’s standard COD option does not check who is ordering. That is the gap the next section covers.
How do you reduce fake COD orders?
Confirm every COD order with the customer before you ship, verify the phone number before checkout if fake orders are frequent, act on orders nobody confirms, and block contacts that keep placing fake orders. Some stores also take a partial prepayment on COD orders.
- WhatsApp order confirmation. After checkout, Cartsaver sends the customer a WhatsApp message with the order details and Confirm and Cancel buttons. One tap marks the order verified in Shopify. See one-tap WhatsApp order confirmation.
- OTP verification before checkout. The customer verifies their phone number with a 4-digit code on WhatsApp or SMS before checkout, and with Restrict COD to Verified Customers turned on, cash on delivery appears only after that check. See pre-checkout OTP verification and the Fast Checkout one-page COD form.
- Act on unconfirmed orders. Cartsaver flags orders nobody confirms as high risk, or cancels them, after a wait you set from 30 minutes to 24 hours. See fake COD order protection.
- Block repeat offenders. Block phone numbers and emails that keep placing fake orders, so they receive no codes or confirmations. See how to block a customer on Shopify.
- Partial prepayment. Some stores ask for a deposit or the shipping fee upfront on COD orders. It filters out fake orders but also loses real buyers who chose COD to avoid paying online. Cartsaver does not collect deposits or partial payments; it verifies the customer instead, and with Online Payment Bypass, customers who prefer to pay online skip the code and pay in full at Shopify checkout.
Once COD orders are confirmed, the same WhatsApp conversation keeps working for you: order updates that keep the customer expecting the courier, one-tap cross-sells after confirmation and review requests after delivery.
Frequently asked questions
What is COD?
COD means cash on delivery: the customer orders online and pays when the parcel is delivered, usually in cash to the courier, instead of paying at checkout.
Is cash on delivery safe for the customer?
Yes, for the customer it is the lowest-risk way to buy online: they pay only when the parcel is in front of them, and they don’t share card details with the store. The risk sits with the merchant.
Can I charge an extra fee for cash on delivery on Shopify?
The cash on delivery manual payment method does not add a fee for you. Stores that charge one usually mention it in the Additional details text and build it into their shipping rates. Tell customers about any fee before they order.
When does a COD order count as paid in Shopify?
When you mark it as paid. Shopify creates COD orders as payment pending; mark each one as paid on the order page once the courier has settled the cash with you.
How do I stop fake COD orders on Shopify?
Confirm every COD order with the customer before shipping, for example with a one-tap WhatsApp confirmation, then flag or cancel orders nobody confirms and block repeat offenders. Cartsaver does all of this inside Shopify, and can also show cash on delivery only to customers who verified their phone number.
Does Cartsaver work outside Egypt?
Yes. WhatsApp confirmation works in every country you allow, and messages can go out in English or Arabic. On the default sender, SMS codes reach Egyptian numbers only; stores on Scale, Ultra and Elite can connect their own SMS provider. Start on the Free plan from the Shopify App Store.