The cash-on-delivery system introduced by e-commerce sites to eliminate customers' security concerns and ensure they can shop comfortably has become a significant factor for potential customers worried about the security of their credit card information. Like any payment system, the cash-on-delivery method has both advantages and disadvantages. In this article, we will discuss the advantages and disadvantages of the cash-on-delivery method used by e-commerce companies and its role in establishing trust with customers.
Advantages of Cash-on-Delivery Method
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Advantages for Sellers Since the advent of e-commerce, overcoming the trust issue has been one of the most challenging obstacles for e-commerce companies. While various methods have been tried to address this issue, none have replaced the cash-on-delivery system. In this context, the biggest advantage of the cash-on-delivery system for sellers is that it prevents customers from worrying about the security of their credit card information and also allows potential customers without credit cards to join the e-commerce ecosystem by using this service. As mentioned in different articles, e-commerce companies work to encourage repeat purchases from existing customers. Integrating potential customers who cannot shop from e-commerce sites due to trust issues into the ecosystem and offering them the cash-on-delivery option can also lead to their next needs being purchased in the same manner.
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Advantages for Buyers There are many factors that differentiate e-commerce from physical stores. In a physical store, you can see, touch, and make a decision based on the product, allowing for secure shopping. In e-commerce, however, products are in a digital environment, so selection is made by examining photos on the website. Seeing or touching the product is not possible on e-commerce platforms. Additionally, the security of credit card information used during the payment process is a concern for customers. The cash-on-delivery method allows the product to be delivered to the customer's door. The customer has the chance to inspect, check, and pay or not pay for the product there. This situation helps resolve security concerns and encourages the customer to make a purchase.
Disadvantages of Cash-on-Delivery Method
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Disadvantages for Sellers The cash-on-delivery system is generally more advantageous for customers. However, it has several disadvantages for sellers, including:
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Cancellation of orders without reason
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Orders placed by individuals who have not proven their credibility and are ordering for entertainment purposes
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Products being delivered to the wrong persons and thus canceled
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Delivery issues due to incorrect delivery information
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Orders being canceled due to non-payment of the amount due at delivery
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Cancellation of orders because the product did not meet the customer's expectations
These and similar issues can lead to significant losses for sellers.
- Disadvantages for Buyers The cash-on-delivery method is typically managed by third-party courier companies. These courier companies, acting as intermediaries, charge additional fees for the cash-on-delivery service, which are passed on to the buyer. The buyer sees and approves this fee when placing the order.
Regardless of the payment method, if the ordered product is delivered by courier and the person is not present at the address, the product is taken to the courier’s branch. Depending on each courier company's policy, the product may be held at the branch and, if not collected, returned to the seller. In this case, the buyer will need to reorder the product and deal with the additional time that has passed.
Turkey's first and only e-commerce ERP software, Comwize, supports not only various payment infrastructures but also the cash-on-delivery method.
We have tried to provide the information you might need about the advantages and disadvantages of the cash-on-delivery method. If you want to get to know Comwize, please contact us.
