Complete Guide

Setting Up Cash on Delivery for Your Shopify Store in India

7 min read

Ready to boost your store's conversions?

Install ACOD Cash on Delivery for your Shopify store today and transform how you handle COD payments.

If you're running an e-commerce store in India, you know one thing for sure: Cash on Delivery isn't just a nice-to-have payment option – it's absolutely essential. With the majority of online shoppers in India preferring COD over digital payments, not offering this option is like leaving money on the table.

But here's the challenge – managing COD payments comes with additional costs: higher return rates, manual processing, and cash handling fees. How do you offer COD to boost sales while protecting your margins?

Why Cash on Delivery Matters for Indian E-commerce

Before we dive into the setup, let's understand why COD is so crucial in the Indian market:

Trust Factor

Many shoppers are still wary of paying before seeing the product, making COD a trust-building payment option.

Few Credit Cards

Many shoppers in India don't have credit cards or digital payment methods, making cash the easiest option.

Less Risk for Customers

Customers can check products before paying, making them feel safer when shopping online.

Return Flexibility

Easier to refuse delivery than request refunds for prepaid orders.

The stats don't lie – stores that add COD options see significant increases in conversion rates in India. That's a difference you can't afford to ignore.

The COD Challenge for Merchants

While COD boosts sales, it also brings challenges:

Higher return rates

Significantly more returns compared to prepaid orders

Additional handling costs

Extra fees from logistics partners for COD processing

Cash management overhead

Additional time and resources to manage cash transactions

Delayed payment settlements

Longer wait times to receive payment for orders

This is why many merchants add a small COD fee – it offsets these costs while still giving customers their preferred payment method. It's a win-win when implemented correctly.

Two Ways to Handle COD Payments

Shopify's Built-in COD

How to set up:

Go to Shopify admin → Settings → Payments
Under Manual Payment Methods, select "Cash on Delivery"
Click "Activate" and save changes

Limitations:

No COD fee options
No location-based rules
No order value conditions
No integration with shipping methods
All-or-nothing approach

Basic Functionality

Limited

ACOD Cash on Delivery App

Advanced Features:

Customizable COD fees
Location-based rules for different regions
Order value conditions
Integration with shipping methods
Visual rule builder
PIN code level control

Benefits:

Offset handling costs
Reduce return rates
Improve margins
Better customer experience

Get Advanced Control

Recommended

Real Results: What Our Customers Have Seen

After implementing ACOD, our merchants typically report:

Reduced cart abandonment rates
Increased overall order value
Lower COD return rates through smart fee structures
Better coverage of handling fees, making COD more profitable

"The app did exactly what I needed it to do - allow me to let only a single customer (eventually more, but limited) place orders cash on delivery. The help I received via email was very quick and helpful."

— One of our customers, Shopify App Store Review

Common Misconceptions About Cash on Delivery

There are several myths about COD in India that might be holding you back from implementing it effectively:

Myth: COD is only for low-value products

Reality: Indian customers choose COD across all price points. Even luxury products sell well with COD options, especially for first-time customers who want to build trust with your brand.

Myth: COD always leads to high return rates

Reality: While COD orders do have higher return rates on average, implementing a small COD fee and proper pre-delivery communication can significantly reduce returns. Many successful Indian brands maintain healthy return rates with COD.

Myth: Digital payments are rapidly replacing COD

Reality: While digital payments are growing in India, COD remains strongly preferred in many regions. The pandemic temporarily boosted digital payments, but COD has rebounded and remains essential, especially for new customer acquisition.

Myth: Younger shoppers don't use COD

Reality: Surprisingly, many younger shoppers also prefer COD, especially for first-time purchases from new brands. The preference cuts across age demographics throughout India.

Best Practices for COD in India

Based on our experience with thousands of Indian Shopify merchants, here are the most effective strategies:

Clearly communicate your COD fee

Add a small fee (₹40-100 depending on your product value) and make it visible during checkout.

Set minimum order values

Require a minimum cart value for COD to ensure the transaction is worth the additional processing.

Location-based rules

Customize your COD availability based on return rates in different states and cities.

Pre-delivery confirmation

Contact customers before shipping to confirm they still want the order, reducing return rates.

Ready to Optimize Your COD Strategy?

Cash on Delivery is here to stay in India, and the stores that implement it strategically will have a significant advantage. ACOD gives you the tools to offer COD while protecting your margins and reducing returns.

Install ACOD on Shopify Documentation