How do you set up cash on delivery for your store?
Setting up cash on delivery (COD) takes two things, not one. First, you turn on COD as a payment option at checkout — on most hosted platforms this is a manual or offline payment method you enable in the payments settings, give a label like "Cash on Delivery", and save. Second, and this is the part most guides skip, you arrange for a courier that collects cash from the customer at the door and remits it to your bank account. Without the second step you have a checkout button that promises something your delivery chain cannot deliver.
On HOD Media, COD is available as a checkout option alongside UPI and card payments on a hosted store, and courier integrations cover Indian pincodes, so the checkout setting and the pickup-and-remit side sit in the same place. The full working setup for an Indian seller is: enable COD at checkout, decide which pincodes and which order values are eligible, register with a courier or aggregator on a COD-enabled plan, confirm the COD remittance cycle and per-order COD fee, and make sure your invoice carries Goods and Services Tax (GST) details even though no money moved online. Everything below explains each of those in the order you should do them.
What does enabling COD at checkout actually involve?
Enabling cash on delivery at checkout is a settings change, and on almost every hosted platform it follows the same shape. You open the payments section of your store admin, find the offline or manual payment methods area, add a method, name it "Cash on Delivery", and activate it.
The label matters more than it looks. Indian shoppers scan for the exact phrase "Cash on Delivery" or "COD". If you name it "Pay on Delivery — cash or UPI to the delivery agent", say that, because many courier agents now carry a QR code and the customer may not have notes on hand.
Write the instruction text as though the customer will read nothing else. State that payment is collected at the door, state whether a COD handling fee applies, and state that the amount must be paid in full before the parcel is handed over.
The COD method appears at checkout for every order unless you add rules. Adding those rules is the next step, and it is where most of the money is won or lost.
Which orders should be allowed to use COD?
Cash on delivery should not be offered on every order at every pincode. Three filters do most of the work.
Pincode. Not every courier delivers COD to every Indian pincode, and the COD-serviceable list is usually shorter than the prepaid list. Rural and remote pincodes are frequently prepaid-only. If your platform can check serviceability against courier coverage for the delivery pincode, use it — showing COD and then cancelling the order later is worse than not showing it.
Order value. Set an upper cap. High-value COD parcels concentrate risk: if the customer refuses delivery, you pay forward freight, return freight, and you have the goods back in unknown condition. Many sellers also set a lower floor, because on a very small order the COD fee and return freight can exceed the margin.
Product type. Fragile items, made-to-order items, personalised items and perishables are poor COD candidates. A returned personalised product has no resale value. Restricting COD on those product lines while keeping it on your standard catalogue is a reasonable middle position.
How does the money actually reach you?
The courier collects cash from the customer, holds it, and remits it to your registered bank account on a fixed cycle. That cycle is the number you need to ask about before you sign up, because it determines your working capital.
Remittance cycles vary by courier and by the plan you are on — some remit weekly, some more often, some hold new accounts longer for the first few weeks. Ask for the cycle in writing and ask what triggers a hold.
Couriers also charge a COD fee. It is typically either a flat amount per shipment or a percentage of the collected value, whichever is higher. Add this to your cost per order before you decide whether to absorb it or pass it on as a COD handling charge at checkout.
Reconciliation is the part sellers underestimate. Each remittance is a lump sum covering many orders, and you need to match it back to individual order IDs. Do this weekly from the start. Unmatched COD remittances become impossible to untangle six months later.
What about GST invoicing on a COD order?
Goods and Services Tax (GST) treatment does not change because the customer paid cash at the door. If you are GST-registered, the COD order needs a tax invoice with your GSTIN, the HSN code, the taxable value, and the tax split — CGST and SGST for an intra-state delivery, IGST for inter-state.
The invoice travels with the parcel and is also the customer's proof of purchase, so generate it at dispatch rather than at remittance. HOD Media stores support GST invoicing on orders, which keeps the invoice tied to the order record instead of living in a separate spreadsheet.
A practical note: your revenue recognition and your bank balance will not line up during the COD remittance lag. Your accountant will want the invoice date, not the remittance date. Keep both visible in your order records.
What is RTO and why does it decide whether COD is worth it?
RTO stands for Return to Origin — the parcel goes out, the customer does not accept it, and it comes back to you. RTO is the single largest cost specific to cash on delivery, and it is a cost you pay even though you never received a rupee for that order.
An RTO parcel costs you forward freight, return freight, packaging, and the handling time to inspect and restock. On thin-margin categories a handful of RTOs can wipe out the profit from a much larger number of delivered orders.
The standard levers against RTO are structural rather than reactive: cap COD order value, restrict COD on pincodes where your own return rate is high, make product photos and size information accurate enough that expectations match the parcel, and give customers a reason to prepay.
Track RTO as a percentage of your COD orders, split by pincode and by product. That single report tells you where to switch COD off.
How do you push more customers toward prepaid without losing sales?
A discount on prepaid orders is the most common approach, and the arithmetic is straightforward: if the discount is smaller than your combined COD fee and expected RTO cost, it pays for itself.
Free shipping on prepaid while charging shipping or a COD handling fee on cash orders achieves the same nudge from the other direction. Customers respond to the difference between two visible numbers more than to either number alone.
Order communication also helps. HOD Media supports WhatsApp and email order automation, so dispatch and tracking updates reach the customer on the channel they actually read. A customer who knows when the parcel is arriving is a customer who is home to receive it.
Should you offer COD at all?
Honestly, some stores should not. If you sell high-value single items, made-to-order goods, or you operate on margins under roughly the cost of one round-trip freight, COD can consume more than it brings in. Prepaid-only with UPI and cards is a legitimate choice.
If you sell in categories where first-time buyers hesitate to prepay to an unfamiliar brand, COD is often the difference between an order and an abandoned cart. Trust is the thing COD is really buying you.
The middle path most Indian sellers land on is COD available, but bounded — capped by value, filtered by pincode, switched off for certain products, and priced with a handling fee. That is a configuration decision, not a philosophical one, and you can change it as your own RTO data comes in.
What should you check before you switch COD on?
Confirm your courier's COD serviceability list against the pincodes you actually sell to. Confirm the remittance cycle and the COD fee structure. Set your order-value cap. Decide whether the COD fee is absorbed or shown at checkout. Confirm your GST invoice generates correctly on a cash order. Then place a live test order to your own address and follow the cash all the way to your bank statement.
That last step catches more problems than any amount of reading. If you are evaluating platforms, the question worth asking is not whether COD can be enabled — nearly all of them can enable it — but whether the pincode serviceability, courier pickup, order communication and GST invoice sit in one system or four.