Cash on delivery (COD) has become a popular payment option for online purchases among Malaysian shoppers. With COD, customers can pay for their orders in cash upon receiving the goods, which allows them to inspect the items before payment and ensures security.
Statistics show that with the increase in sales for e-commerce based businesses, the current percentage of 7% of customers who prefer to use COD as their preferred method of payment will also increase.
However, for sellers in Malaysia, offering COD as a payment method requires careful consideration due to the potential risks, such as fraudulent transactions and payment disputes. Sellers need to weigh the benefits and drawbacks of offering cash on delivery and implement proper strategies to provide a seamless purchasing experience for their customers.
This article provides the pros and cons of this payment method and offers guidance to sellers on implementing COD strategies to improve customer satisfaction.
Benefits Of Cash On Delivery
The benefits of offering COD to buyers can help your business in a few ways. Let’s explore the pros of COD for the seller:
- Better cash flow: COD payment results in immediate cash flow for the seller as they receive payment during the product delivery. This can help the seller better manage their finances and inventory.
- Building trust: Sellers can build trust with buyers by offering COD payment, which empowers buyers to check the product before making payment. This increases the buyer’s confidence in the seller.
- Reduced risks: With COD payment, the seller is not exposed to chargeback risks as the customer pays in cash upon delivery. This saves the seller time and money in resolving chargeback disputes.
- Increased sales: COD payment can lure more customers who prefer cash payments, which is still a prevalent payment method in Malaysia compared to credit cards. Consequently, sellers can potentially boost their sales and revenue.
Challenges With COD
Sellers will experience some challenges with offering COD to buyers as it places more risk on the seller than the buyer. Compared to other payment methods, the seller gets the money before sending the product to the buyer, lessening the risk to the business owner. Here are a few other potential challenges you might face with COD purchases:
- Higher operational costs: Providing a representative to collect payment upon delivery can result in higher operational expenses for the seller.
- Fraudulent transactions: The risk of fraudulent transactions is higher with COD payments. Customers may refuse to pay or use counterfeit notes, leading to lost revenue for the seller.
- Increased return rates: Customers may choose COD payment to return the product upon delivery, which can lead to higher return rates for the seller.
- Limited reach: Not all areas may be serviceable for COD payment, limiting the seller’s reach and potentially reducing sales.
How You Can Improve On Customer Satisfaction With COD
Customer satisfaction can be better when you offer COD as an option, but you will need to be strategic about this. The COD experience for the buyer can go both ways, as external variables might make it unsatisfactory. As a seller, you can be proactive and offer better after-sales care for your customers that use COD as a payment option. Here are a few strategies that can help you improve customer satisfaction for COD buyers:
- Communicate clearly: From the beginning of the shopping process, sellers should communicate clearly with customers about the product, expected delivery date, time, and payment amount to avoid any misunderstanding.
- Secure packages: Packing the items securely and adequately helps ensure the buyer receives them in good condition. Use a reliable delivery service to reduce the chances of packages being damaged. This can keep your customers happy and reduce the return rate.
- Provide tracking: Sellers should provide a tracking number so customers can monitor the delivery progress of their orders. This can help customers feel more secure about the purchase and reduce the possibility of missed deliveries.
- Offer after-sales service: Providing friendly and helpful customer service after the purchasing process can assist sellers in answering any customer inquiries and concerns promptly and professionally.
By implementing these strategies, Malaysian sellers can offer their customers a positive and reliable COD purchasing experience, resulting in repeat business and positive word-of-mouth recommendations. Happy customers tend to leave good reviews, which can help to boost your online business.
Cash On Delivery: Win-Win For Both Seller And Buyer
Offering the COD payment option can benefit sellers in Malaysia, but proper strategies are crucial to ensure a positive customer purchasing experience. By implementing effective COD strategies such as clear communication, punctuality, product inspection, and good customer service, sellers can increase customer satisfaction and loyalty, leading to long-term success and growth for their business.
