To reduce cancellations of CoD (Cash on Delivery) orders, Flipkart has introduced a new payment method that will require buyers to partially pay for a product at the time of placing the order. The rest of the amount can be paid at the time of delivery as usual. Called ‘Partial Payment‘, it is expected to reduce cancellations, which is a major issue with CoD orders for e-commerce operators in the country.
“When a customer pays an amount at the time of purchase, the chances of customer cancellations and returns gets automatically diminished”, Flipkart reportedly wrote in a letter to sellers on its platform. As expected, the All India Online Vendors’ Association (AIOVA) has welcomed the move. In a statement to ET, the organization said it is a good first step in making Indian e-commerce entirely prepaid. It also has potential to reduce costs for consumers, the agency said.
The AIOVA also claimed that the decision can eventually lead to a slight reduction in costs for consumers. According to a spokesperson, “This move can lead to 2-3% reduction in prices for consumers. (That’s because) losses of such undelivered orders were factored as a cost (until now)”. It is worth noting, though, that the commissions paid to sellers will remain the same even for partial payments.
Cash on Delivery, or CoD, remains the preferred mode of payment for most users while buying goods online. Introduced by Flipkart in 2010, the system is widely credited with popularizing online retail in India. However, most sellers are now pressing for a shift to fully prepaid orders, like in developed markets. It remains to be seen, however, as to whether that happens any time soon.