COD builds trust with first-time buyers but adds operational complexity. Here is how to run it well with your courier.
Cash on delivery (COD) is a payment method where the customer pays for an order when it is handed over rather than at checkout. It remains widely used in Saudi Arabia, especially for first-time buyers and higher-value items, because it removes the risk of paying for something that never arrives. For sellers, a well-run COD service is a sales enabler; a poorly run one is a cash-flow headache.
The COD process
The seller marks the order as COD and states the amount on the waybill. The courier delivers the parcel, collects the amount in cash or by card on a mobile terminal, and records the payment against the waybill. Collections are reconciled at the courier's hub and remitted to the seller on an agreed cycle.
Card on delivery
Card-on-delivery via mada and credit terminals is now common and reduces both cash-handling risk and the chance of the customer not having exact cash. Ask your courier what share of COD collections is taken by card.
Remittance and reconciliation
Look for a remittance cycle of one week or less, a detailed statement matching every waybill to a payment, and a portal where you can see collected, pending and remitted amounts in real time.
Fees
COD usually carries a small fixed fee per parcel or a percentage of the collected amount. Factor it into pricing or set a minimum order value for COD.
Reducing COD returns
- Confirm orders by SMS or WhatsApp before dispatch.
- Send a delivery window so the customer is available.
- Offer card-on-delivery as the default.
- Track return rates by customer and limit COD for repeat refusers.
TQM International offers COD and card-on-delivery across Saudi Arabia with weekly remittance, full reconciliation reports and pre-delivery order confirmation to cut refusals.
