Cash on Delivery is one of the most popular payment options for customers in the Middle East. A very significant challenge facing e-commerce startups is providing multiple payment solutions for their customers. Online stores should strive to provide an integrated package of payment options that match the preferences of their customers. It is therefore inevitable that Cash On Delivery must be accepted for businesses to operate and grow.
What is Cash on Delivery?
This method of payment means that the customer can pay with cash or card when a product bought online is delivered to their home or workplace. Cash is most commonly used; this is known as Cash on Delivery (COD).
Cash on Delivery in numbers
- 76% of customers in the Middle East pay using COD.
- 64% of customers in the Middle East prefer to pay using COD.
- The rate of return for products bought via COD is 19%, compared to an 8% return rate for products bought via online payment.
- The top three Middle Eastern countries that use COD as a method of payment are: Egypt (used by 72% of customers), UAE (51% of customers), and Kuwait (41% of customers).
- 51% of online shopping transactions in the Arab world are undertaken based on the availability of COD as a method of payment.
As with any payment method, there are pros and cons. Some of the most notable are discussed below.
Advantages of Cash on Delivery
- It provides customers with more flexible purchase options, increasing the likelihood that they’ll make a purchase.
- Allowing COD helps businesses to build the confidence and feeling of security amongst their customers, many of whom have concerns about paying for a product before they receive it.
- This method of payment ensures that customers only have to pay for products that are actually available. Once a customer places and pays for order online, there is a possibility that the product might be out of stock. The store then has to inform the customer, causing inconvenience for both parties.. Cash on Delivery removes this possibility.
- By allowing the customer to pay with cash, no credit or debit card is required. This means that customers who do not necessarily have access to debit or credit cards can shop online and obtain products that would otherwise be out of reach.
- There is a recognition that the majority of sales conducted online in the Middle East are now made via COD.
Disadvantages of Cash on Delivery:
- Some fake requests can be submitted. Validating requests is time-consuming for staff.
- Because the customer needs to be present in order to pay, the arrival of the product could be delayed.
- Additional charges are sometimes required.
- The store can incur a loss if the customer cancels the purchase or has refused to accept the product.
- This feature is not available in all stores.
However, none of the disadvantages mentioned above are insurmountable. By taking simple, practical steps, online stores can find ways around them.
How e-commerce stores can overcome these obstacles
- Establish a minimum payment or order size when customers want to use COD.
- Always obtain customers’ details and contact information, allowing for clear communication between the store and the customers.
- Ensure that the product description and images are 100% accurate. This reduces the likelihood of customers refusing products that don’t live up to their expectations.
- Focus on the right target audience, and provide customers with products they really need.
- Stores should ensure flexibility in the ordering process. This can be achieved through communication – following up on orders by contacting customers to confirm and verify the purchase, prior to the product being sent out.
Cash on Delivery is one of the services offered by UStore
UStore strives to provide the best e-commerce experience for customers in Kuwait and throughout the Arab world. We offer a range of options designed to improve the online purchasing experience
How to activate Cash on Delivery via the UStore store
This is a paid feature and available only to subscribing merchants. Contact sales to upgrade to one of our paid plans
- Log in to your UPay account
- In the side menu, click (Store)
- From the drop-down menu select (Settings)
- In the horizontal menu, click (Cash on Delivery)
- Enable the option (Enable)
Congratulations, your store now offers Cash on Delivery! (You can opt-out of the service at any time).
Cash on Delivery is one of the most important features any online store needs to succeed. It has many advantages, the most important of which is how it builds customer confidence. Once the first transaction has been completed and the product has been delivered successfully the online store gains credibility. This will mean they are more likely to become a loyal returning customer – a key factor in the success of e-commerce stores.
Ultimately, e-commerce and online sales can be a double-edged sword for businesses, potentially boosting sales, but also requiring continuous verification and follow-up. The process of selling online is a valuable experience for stores, providing the opportunity for innovation, and providing direct access to customers. However, merchants need to make a real effort to build a healthy relationship with their customers.
Steps to ensure the success of your online store
- Set up a clear sales-funnel, guiding the customer through the whole process – from showing an interest in the product, to making the purchase, and then receiving the delivery.
- It’s important to remember that the process doesn’t end there! Merchants should contact customers and make sure they’re satisfied with the product.
- Interact with those who buy your products, getting to know exactly what they want. Spoil your customers!
- Providing multiple payment options, ensuring that you use a reputable payment gateway that is available in your customers’ locations.
- Create an online store via UStore so that you can enjoy the many features and benefits offered by the platform.