Online payments and cash on delivery
Choose how online customers pay you, and keep cash on delivery from turning into returns.
6 min read
How a customer pays decides more than when you get the money. It decides how many orders go through, how many come back, and how much time you spend chasing. Online, the choice is usually between asking for payment upfront — UPI, a payment link, or a payment gateway on a website — and cash on delivery. This lesson is how to choose and how to keep each one from costing you.
The ways online customers pay
| Method | How it works | Good for |
|---|---|---|
| UPI to your ID or QR | Customer pays from their own app; you check it arrived | WhatsApp and Instagram orders |
| Payment link | You send a link; customer pays by UPI, card or netbanking | Orders by chat where customers want options |
| Payment gateway on a website | Checkout on your site takes the payment | Websites with many orders |
| Cash on delivery (COD) | Courier or your delivery person collects cash | Customers who do not yet trust you |
Payment links and gateways usually charge a fee per transaction, and courier companies charge for collecting COD. These differ by provider and plan and change over time — read the current charges before you choose, and count them in your price.
Prepaid is better for you
When the customer has paid before you ship, they rarely refuse the parcel, you are not carrying the cost of failed deliveries, and the money is in your account before the stock leaves your hands.
Ways to make prepaid the normal choice:
- Put your UPI QR and ID in your WhatsApp quick replies, your Instagram highlights and on your page.
- Make prepaid the default in how you write: "Pay by UPI to confirm your order."
- Offer a small reason to prepay — faster dispatch, a free add-on — rather than a big discount you cannot afford.
Never dispatch on a screenshot alone. Fake payment screenshots are a common trick. Check that the money has actually arrived in your own bank or UPI app before the parcel leaves.
Why cash on delivery is expensive
COD can win orders from customers who do not know you yet. It also brings:
- Refusals. A customer who ordered on impulse can simply say no at the door. You have paid for shipping out — and often back.
- Delay. The courier collects the cash and pays it to you later, not that day.
- Stock in transit. Goods sit with the courier while the order is out and coming back.
A made-up example: you send 100 COD parcels and 20 are refused. Those 20 earn nothing, cost you shipping both ways, and can come back damaged. The 80 that are accepted have to cover all of it.
If you offer COD, limit it
- Confirm before dispatch. A call or WhatsApp message the day before — "Your order of ₹X is coming tomorrow, cash on delivery, please keep it ready" — catches many who have changed their mind.
- Ask for a small advance on COD orders, to cover shipping. Customers who pay something rarely refuse the rest.
- Keep COD to lower-value orders and to areas where refusals have been low.
- Keep a list of numbers that have refused before.
Track your refusal rate per month. If it keeps rising, tighten COD — require the advance, or offer it only to repeat customers.
Matching payments to orders
Whatever you use, every payment has to be matched to an order. Ask customers to put their name or order number in the payment note, check payments against your order list every evening, and send a confirmation once payment arrives. A confirmation message is also the customer's receipt, and the start of the trust that brings the next order.
Ask the tool below about your own orders — what you sell, your prices and how customers pay — and it will help you work out which payment options are worth offering.