What is Cash on Delivery?
5 min read
Cash on Delivery (COD) is the dominant payment method for Egyptian e-commerce — accounting for 60–70% of all online orders. Understanding exactly how it works, and where money leaks happen, is critical for any brand that ships product.
How COD works
The customer places an order. Your courier picks up the package from you. They deliver it to the customer, who pays cash on the spot. The courier then holds that cash and remits it to you — usually every 5 to 7 business days — after deducting their fees and any returns.
The reconciliation problem
Here's where most brands lose money: the courier sends you a batch payment, but you have no easy way to verify it. Which orders were delivered? Which were returned? What was the delivery fee? What was the return fee? Couriers send Excel sheets that are hard to cross-reference against your own order records.
The key numbers you need to track
For every COD shipment, you need to know: the declared value (what the customer pays), the courier's delivery fee (charged per successful delivery), the return fee (charged even when the customer refuses), and net cash received per order. The difference between declared value and net received is your COD cost.
Return rates in Egypt
Egyptian COD return rates typically run between 25% and 40% — significantly higher than prepaid orders. Why? Because it costs the customer nothing to refuse at the door. A "yes" while ordering becomes a "I changed my mind" on delivery day. This is why reconciliation isn't optional — it directly determines how much of your revenue you actually keep.
How to handle COD properly
Reconcile every batch when it arrives. Match each order ID to your records. Track which courier performs best (lowest return rate, fastest payment). Consider WhatsApp confirmation calls before dispatch to reduce refusals. And always calculate COD fees as a cost of sale — not an afterthought.
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