By Converteasy Team, Official Shopify Experts & E-commerce Strategists in Kerala; we help ambitious brands transition from manual selling to fully automated, high-converting online stores. With 5+ years of experience in Shopify development and 60+ successful Kerala brands launched, we specialize in Shopify store setup, automation, and growth-focused e-commerce strategies.
Published in Blog on April 24, 2026 | Last Updated on April 24, 2026
12 min read
If you’re setting up a Shopify store in Kerala, one question will come up almost immediately: should I offer Cash on Delivery?
Ask your customers, and most will say yes. Ask your logistics partner, and they’ll warn you about high RTO rates. Ask an accountant, and they’ll point to the cash flow problem. Ask another seller, and they’ll tell you COD is the only reason their store survived its first six months.
Everyone has a strong opinion. But what does the data actually say — and what makes sense specifically for a Kerala brand in 2026?
This blog gives you a fully research-backed answer. Our team of Shopify developers in Kochi at ConvertEasy has helped 60+ Kerala brands set up and manage COD on Shopify, and we’ve seen the real numbers firsthand.
Despite UPI processing over 21 billion transactions in December 2025 alone, and India leading the world in real-time digital payments, COD remains dominant in eCommerce. Why? Because paying online for a product you haven’t seen – from a brand you don’t know – still feels risky to a large segment of Indian shoppers.
But here’s the number that should make every seller pause:
That’s a staggering difference. For every 100 COD orders you ship, 26 come back without earning you a single rupee – and you pay both forward and reverse shipping costs.
The question, then, is not simply ‘should I offer COD?’ It’s ‘how do I offer COD in a way that doesn’t destroy my margins?
Most sellers think about COD in terms of the sale – they don’t calculate the full cost of a COD order that becomes an RTO. Here is what a ₹1,000 COD order that fails to deliver actually costs you:
At a 26% RTO rate, for every 100 COD orders you ship, you lose ₹19,000 – ₹36,000 in pure logistics costs. On top of that, you earn zero revenue from those 26 orders. This is why RTO is called the ‘silent killer’ of D2C brands in India.
Not all cities are equal when it comes to RTO rates. The Shipway ShipNotes Report (August 2025) – which analyzed FY25 data across thousands of pin codes – reveals something very useful for Kerala sellers:
This is genuinely good news. It means Kerala customers – at least in Thrissur and Kochi – are among India’s most reliable COD buyers. They place orders with genuine intent and accept deliveries at a much higher rate than the national average.
The practical implication: if you’re a Kerala brand selling primarily within Kerala and South India, your COD experience will likely be much better than the national 26% average. However, if you’re scaling to Tier-3 North Indian cities, North-eastern states, or J&K, your RTO rates will climb significantly.
Xpressbees is a Pune-based logistics company that has grown rapidly to become one of India’s top five courier services. It is backed by major investors and handles over 2 million shipments daily. For Shopify sellers in Kerala, Xpressbees is worth considering particularly if you need same-day or next-day delivery capabilities.
Orders delivered within 1-2 days had a 22% RTO rate. Orders taking 3-5 days had 27%. Orders taking 5+ days had a 35% RTO rate. (Source: Shipway ShipNotes, FY25)
The longer your delivery takes, the more time the customer has to change their mind, forget the order, or find the product elsewhere. For Kerala brands shipping pan-India, this is a strong argument for choosing a courier with fast South-to-North transit times.
Orders priced ₹500–₹1,000 had the highest RTO rate at 28%. Orders under ₹500 had 25% RTO. Orders above ₹1,000 had 24% RTO. (Source: Shipway ShipNotes, FY25)
This is counterintuitive but important. Mid-range orders are most prone to impulse buying — the customer thinks ‘why not?’ at checkout but reconsiders at the doorstep. If your products fall in the ₹500–₹1,000 range, managing COD carefully is especially critical for your profitability.
Shopify does not have a built-in COD management system with rules and limits. To set it up properly for a Kerala brand, you need a third-party app. Here are the best options verified on the Shopify App Store as of early 2026:
Pro Tip: The single most impactful feature to enable immediately is WhatsApp OTP verification. Releasit and CODBot both offer this – it sends a WhatsApp message to the customer asking them to confirm the order with a one-time code. This alone eliminates a large percentage of fake or casual COD orders before you even ship.
Based on our experience setting up Shopify stores for 60+ Kerala brands, here is the COD configuration we recommend as a starting point:
Add ₹30–₹50 as a COD handling fee at checkout. This does two things: it recovers your courier’s COD collection charge, and it gently filters out buyers who aren’t fully committed. Show it transparently – ‘Cash on Delivery fee: ₹40’ – not hidden. Most genuine buyers will pay it without hesitation.
High-value COD orders carry disproportionate risk. If a ₹4,000 saree comes back as an RTO, the financial hit is severe. Disable COD for orders above ₹2,500–₹3,000 and display a message: ‘COD is available for orders up to ₹2,500. For larger orders, secure payment is required.’ Most customers who are genuinely interested in a high-value item will pay prepaid.
Using the Nex Advanced COD or Releasit app, disable COD for specific pin codes where you’ve experienced repeated RTOs. Key zones to consider restricting for new stores: Patna, Srinagar, Varanasi, Ranchi, Jammu, Meerut, Guwahati, and remote Northeastern states. These cities rank highest for RTO rates nationally.
Instead of simply restricting COD, incentivise prepaid. Display at checkout: ‘Save ₹50 by paying online.’ This is more effective than hiding COD because it gives the customer a positive reason to choose prepaid rather than feeling punished for wanting COD. Brands that implemented this saw a 15–25% shift from COD to prepaid without losing the sale.
Mandatory: send a WhatsApp or SMS OTP to every COD customer immediately after order placement. The order should not move to packing until the OTP is confirmed. Any order not confirmed within 12 hours should be automatically cancelled. This single step eliminates the majority of fake and impulsive COD orders.
Yes. But smartly.
Here is the honest answer based on data and real experience with Kerala brands:
Pro Tip: Track your COD-to-prepaid ratio monthly. A healthy Kerala D2C brand should aim for at least 40-50% prepaid orders within 6 months of launch. If you’re still at 80%+ COD after 6 months, your brand trust-building needs attention — better product photos, reviews, and return policies can shift this ratio significantly.
Getting COD configured correctly – with the right app, the right rules, the right pin code restrictions, and WhatsApp verification set up – is one of the first things our team does for every store we build. As trusted Shopify developers in Kochi ConvertEasy sets up your full COD configuration alongside payments, shipping, and WhatsApp automation – so your store is protected from day one.
Let’s turn your brand into a 24/7 automated selling machine. Share your ideas, and we’ll craft the perfect Shopify solution for you.
