Complete Guide to Cash on Delivery (COD) on Shopify: Setup, Fees, Shipping, and Returns
Cash on Delivery (COD) remains a dominant payment method in many countries, especially in regions where trust in online payments is still growing. In some markets, COD accounts for more than 80% of all eCommerce orders. This guide covers how COD works on Shopify, how to set it up, how to apply fees, how to manage shipping, and how to reduce return rates.
Shopify allows you to offer COD as a payment method at checkout. To activate it, follow this tutorial:
➡️ How to Enable the Cash on Delivery (COD) Payment Method in Shopify
Once enabled, customers will see the option to select Cash on Delivery at checkout:
When a customer completes an order with COD, the order status will show as Payment pending in your Shopify admin:
After the order is delivered and the payment is collected, you can mark the order as paid by clicking Collect payment → Mark as paid:
To offset additional operational costs tied to COD (like higher return rates or courier handling fees), many merchants apply a small extra fee to these orders.
Learn how to add a fee to COD orders with this detailed tutorial:
➡️ How to Add a Cash on Delivery (COD) Fee on Shopify: Complete Guide for Store Owners
Shipping a COD order is identical to shipping any other Shopify order:
For manual fulfillment, click Fulfill item on the order page.
For automated shipping, ensure your shipping app supports COD. Some compatible apps include:
Sendcloud – ideal for merchants in Europe
ShipHero – global shipping and inventory
Shippo – widely used in North America
One major challenge with COD is the high return rate. Customers can refuse delivery since no upfront payment is made.
Here are steps to reduce returns:
Apply a COD Surcharge
A small fee helps customers commit to the order and discourages non-serious buyers. (See how to apply the fee in the section above.)
Order Confirmation by Phone
Call each COD customer before dispatch to verify the order. This is highly effective but time-consuming and may require a call center if your order volume is high.
Use Automated Verification Tools
If manual calling is not practical, consider using apps that confirm orders via:
SMS with OTP (One-Time Password)
IVR (Interactive Voice Response) calls
These tools request confirmation before the order is fulfilled and help filter out fake or low-intent orders.
You can find suitable apps on the Shopify App Store:
COD OTP Verification Apps
IVR Call Verification Apps
COD can be a powerful tool to increase sales, especially in markets where online payment trust is low. However, to make it work efficiently, it’s important to:
Set it up correctly in Shopify
Add a fee to manage extra costs
Use reliable shipping tools
Reduce return rates with verification methods
If you have any questions about setting up or managing COD orders, feel free to contact our support team from within the app.
How Cash on Delivery Works on Shopify
Shopify allows you to offer COD as a payment method at checkout. To activate it, follow this tutorial:
➡️ How to Enable the Cash on Delivery (COD) Payment Method in Shopify
Once enabled, customers will see the option to select Cash on Delivery at checkout:
When a customer completes an order with COD, the order status will show as Payment pending in your Shopify admin:
After the order is delivered and the payment is collected, you can mark the order as paid by clicking Collect payment → Mark as paid:
How to Add a Fee to Cash on Delivery Orders
To offset additional operational costs tied to COD (like higher return rates or courier handling fees), many merchants apply a small extra fee to these orders.
Learn how to add a fee to COD orders with this detailed tutorial:
➡️ How to Add a Cash on Delivery (COD) Fee on Shopify: Complete Guide for Store Owners
How to Ship COD Orders in Shopify
Shipping a COD order is identical to shipping any other Shopify order:
For manual fulfillment, click Fulfill item on the order page.
For automated shipping, ensure your shipping app supports COD. Some compatible apps include:
Sendcloud – ideal for merchants in Europe
ShipHero – global shipping and inventory
Shippo – widely used in North America
How to Reduce Return Rates for Cash on Delivery Orders
One major challenge with COD is the high return rate. Customers can refuse delivery since no upfront payment is made.
Here are steps to reduce returns:
Apply a COD Surcharge
A small fee helps customers commit to the order and discourages non-serious buyers. (See how to apply the fee in the section above.)
Order Confirmation by Phone
Call each COD customer before dispatch to verify the order. This is highly effective but time-consuming and may require a call center if your order volume is high.
Use Automated Verification Tools
If manual calling is not practical, consider using apps that confirm orders via:
SMS with OTP (One-Time Password)
IVR (Interactive Voice Response) calls
These tools request confirmation before the order is fulfilled and help filter out fake or low-intent orders.
You can find suitable apps on the Shopify App Store:
COD OTP Verification Apps
IVR Call Verification Apps
Final Notes
COD can be a powerful tool to increase sales, especially in markets where online payment trust is low. However, to make it work efficiently, it’s important to:
Set it up correctly in Shopify
Add a fee to manage extra costs
Use reliable shipping tools
Reduce return rates with verification methods
Need Help?
If you have any questions about setting up or managing COD orders, feel free to contact our support team from within the app.
Updated on: 01/04/2025
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