Cash on delivery in Pakistan: how it works, what it costs, and how to cut returns

Cash on delivery is not a payment method Pakistani sellers chose. It is the one their customers trust, and any store that refuses it is turning away a large share of first-time buyers.

It also has costs that do not appear on any invoice. This guide is about both halves.

How the money actually moves

1. A customer places an order on your site. No money changes hands.
2. You pack the parcel and book a pickup with your courier, declaring the COD amount to collect.
3. The courier delivers and collects cash from the customer.
4. The courier remits the collected amount to your bank account — usually on a weekly cycle, sometimes fortnightly — after deducting their charges.

The gap between step 2 and step 4 is the part that catches new sellers out. You have paid for stock and packaging, and you will not see the money for one to three weeks. If you are growing fast, that gap grows with you.

What COD really costs

Ask any courier for these four numbers before you sign, and get them in writing — they vary by company, by volume, and by how well you negotiate:

• Delivery charge per parcel, usually banded by weight and by whether the destination is a major city or not.
• COD service charge — a percentage of the collected amount, or a flat fee, for handling cash.
• Return charge — what you pay when a parcel comes back. This is the number people forget to ask about.
• Remittance cycle — how many days between collection and the money landing.

The major national couriers all run COD services and all publish rate cards to registered businesses. Rates move, so anything you read online — including here — is a starting point for a conversation, not a quote.

The return rate is the real cost

A refused COD parcel is the worst outcome in ecommerce. You have paid to ship it out, you pay to ship it back, the stock has been on a truck for a week, and you earned nothing. A store running a high return rate can look busy and still lose money on every order.

Returns cluster around a few causes, and most of them are fixable:

1. The order was never serious

Someone tapped "order" out of curiosity, or gave a wrong number. A short confirmation message — WhatsApp works better than a call — filters these before you pay to ship. Confirm within a few hours while the purchase is still fresh in their mind.

2. The product was not what they expected

Unedited photos, honest colour, real measurements, and a clear size guide. Every gap between the page and the parcel is a refusal waiting to happen. If a fabric looks different in daylight, say so on the page.

3. It arrived too late to matter

A dress ordered for a wedding is worthless the day after. State your real delivery window, and flag orders that are running late before the customer notices.

4. They could not be reached

Incomplete addresses are endemic. Ask for a landmark or nearby shop as well as the address, and make the phone-number field mandatory and validated.

Habits that bring returns down

• Confirm every order the same day, by message.
• Send the tracking number as soon as the parcel is booked — a customer expecting a delivery answers the door.
• Keep a quiet note of repeat refusers, and ask them for advance payment next time.
• Offer a small discount for advance payment. Even a modest one converts a slice of your COD orders into prepaid ones, and those almost never come back.
• Watch your return rate as a number, monthly. If you are not measuring it, you cannot tell whether anything you changed helped.

How this works on LaunchLancer

Cash on delivery is built into checkout on every plan — there is nothing to enable and no gateway to sign up for. Orders arrive in your dashboard with the customer's address and phone number, you mark them confirmed, packed and dispatched as they move, and the customer can track the order from your storefront without creating an account.

If you are still setting up, start with our step-by-step guide to launching a store in Pakistan, or open a free store and place a test order through it — the fastest way to understand your own checkout is to be your own first customer.