While getting to 200% prepayment is a noble and, in certain cases, necessary goal for e-commerce buildings, cash-on-delivery (COD) is not going anywhere any time soon. The major problem with COD is that merchants have to deal with an occurrence called “rejection at doorstop”.
What is rejection at doorstep?
Rejection at doorstep is when a customer places an order and subsequently at the time of delivery decides not to receive it. This results in the e-commerce merchant having to deal with the following:
- Pay the courier for the delivery attempt
- Have the product be out of stock for 5-10 days, meaning that they will be unable to sell it to other customers
- Higher chances of receiving the package in an unsellable condition
If rejection at doorstep happened infrequently, COD would not be considered a major problem. However, it happens about 7-10% of the time across the e-commerce landscape. Some unfortunate e-commerce merchants even have rejection at doorstep go above 15%, which can be crippling to a small startup.
The purpose of this article is to help e-commerce startups reduce the financial impact that is caused by rejection at doorstep and give them a toolkit to work with when starting or scaling their e-commerce businesses.
COD RULES
There are multiple ways to try and reduce your rejection at doorstep rate and we will discuss some of the most common ways now. A helpful mnemonic device to remember these is COD RULES. Here is what that stands for:
Customer needs to be screened
Officially identify the client
Did they confirm the order?
Request partial payment
Unite the courier and customer
Let’s find out what went wrong
Enter the blacklist
Customer needs to be screened: Whenever you get an order, conduct a basic screen. Does this customer seem to be in my target market? Do they live in the same areas where my other customers are coming from? Are they ordering the most popular items or the most expensive items?
To give you an example of this, when I started PetPeople.pk, a marketplace for pet food and toys, within our first two months, we received an order from Peshawar for around Rs50,000 and the order was a mix of cat and dog food. This happened to be the first order we ever got from Peshawar and was also the largest order we had ever received up to that point by a magnitude of at least 10 times. Plus, we usually found customers only ordered items for one species of animals rather than two.
So, if something about the order seems off, it is best to take some additional action.
Officially identify the client: If you have any doubts about the order of the customer, then it is time to stalk them (not in a creepy way, please). See if the customer is on social media and, if they are, is their account an old one or a new one? You can usually use the e-mail address or phone number they have given to find more information about them on Facebook or WhatsApp.
What I used to do was sync by WooCommerce customers data with a unique Google account I created. I then had that account synced on my dedicated customer helpline, so with a few minute so the order being placed by the customer, their contact was created in my phone and I could check if they were on WhatsApp. It saved me the hassle of having to add people to contacts all the time.
Did they confirm the order?: If this fails, call up the customer or WhatsApp / text them asking to confirm the order. This is one of the simplest things you can do. If you are especially suspicious, you can call up the customer and judge for yourself if the customer seems trustworthy. Trust your gut!
I remember for another high value order at PetPeople, we were unsure of the customer even after our text verification, so we called them up and pretending to confirm the flavour of their cat food. While doing that, we asked them other questions such as their cat’s name, age, etc. to try and determine if they were genuine. Usually, talking to the customer helps build up trust much faster and is a great way of building up a personal bond with them as well.
Request partial payment: If, for any reason, you are not convinced, or if the risk is too high for your business to take, then ask for some money up front. It is best if they can send across all the money up front, as then you save on the shipping costs. However, failing that, ask for some money up front that at least covers your shipping costs.
For the Rs50,000 order we got from Peshawar, we calculated that the shipping alone would come to at least Rs4,500 and so we asked the customer to send us Rs5,000 in advance. Therefore, if they did not pay the remainder as COD, at least did not lose out on the shipping costs.
Do not be afraid to ask for prepayment over the phone. Just be polite, professional, and courteous. Give them multiple options for payment, including bank deposits, EasyPaisa, or JazzCash. Make sure the payment methods are listed on your website, and you can have a message / e-mail ready to send as soon as you talk to the customer.
Unite the courier and customer: If, after all this, the courier company sends you a message saying the order was rejected, do not despair. The time between the courier informing you and them returning the product back to you is critical and you need to be proactive.
Make sure you courier company tells you as soon as the customer rejects the order, and definitely before they ship the item back to you. Courier companies usually give you a few hours to call them back to arrange a re-attempt, so be very proactive. As soon as you get this intimation, call up the customer and tell them a delivery attempt was made. Also, make suee your delivery company is making the number of attempts it promised you in its contract.
Regularly check the courier company’s status updates for pending deliveries, and keep the customer informed of updates.
Let us find out what went wrong: If the product gets returned even after multiple delivery attempts, keep trying to call the customer and try to get an explanation. Sometimes, it could be an honest mistake, or the fault of the courier. Either way, keep a record. It is very important. Trust me.
Sometimes, the customer can make a mistake and usually I have found that they then go out of their way to make it up to you. Cultivating strong customer relationships is critical, because these are the same customers who will say good things about your service in the future.
If the customer says the courier never attempted the delivery, reach out to the courier company and ask for an explanation. Usually, getting them to entertain one or two cases will be difficult, but this is where if you have a record and start seeing a certain pattern emerging, you can make a stronger case and then rethink your options in terms of which courier company to use.
Connect with the customer and let them know that multiple delivery attempts were made. Try to find out if the failure was due to extenuating circumstances from the customer’s side, or was it the courier’s fault.
Enter the blacklist: For any customer that you feel deserves it, or does not answer your call after a few attempts, automatically put them on a black list that you keep internally. Use this list to help filter our suspicious orders in the past. Be sure to save the address, e-mail address, and phone number. Sometimes, bad actors can change their e-mail address, but may end up using the same phone number or address. You want to check against all of these options.
Was the Peshawar order genuine then?
It was 🙂
Yup. I had the same question. Was the Peshawar order genuine or not?
It was 🙂
Well Adam you have only mentioned one side of the coin. The couriers do not allow inspection of the product before getting the payment. I have been victim of these so called online ventures you order one thing they send you some other thing. and once the courier leaves to payment is stuck the vendor is no more willing to entertain you. So refusal rate, as you mention it, is going to increase as long as such fradulent people operate in our e commerce industry.
There should be a consortium of ecommerce merchants where they can share such kind of black list customer detail. This will discourage such customers.