E-commerce Companies Get Set For A New Cash-On-Delivery Model
e-Commerce limit or suspend the cash on delivery option, for the time being
Less than 24 hours after the government banned old Rs 500 and Rs 1,000 currency notes, e-commerce companies moved fast to either suspend or discourage the cash-on-delivery (COD) option.
Amazon has stopped accepting COD orders for the time being, while others like Flipkart, Snapdeal and Shopclues have put restrictions on the quantum of cash-on-delivery orders.
We have temporarily stopped cash as a payment option for new orders. Customers that had already placed COD orders before midnight of November 8 can pay for their orders using debit or credit cards or currency of valid denominations.Amazon spokesperson said in an email interaction
While Snapdeal has set a limit of Rs 2,000, ShopClues and Flipkart are not accepting cash-on-delivery for orders beyond Rs 1,000.
As interim measure, we have restricted new COD orders to Rs 2,000 to make it convenient for the buyers and the delivery personnel. The COD limits will get increased gradually over the next few days.Snapdeal spokesperson said in an email interaction.
Sanpdeal said, ordinarily nearly 50 percent of its orders are COD.
BigBasket, on the other hand is accepting cash on delivery but have announced that they will not accept Rs 500 and Rs 1000 currency notes.
While we are encouraging customers to pay online, the COD option is also available and we are also offering card on delivery option. For our frequently ordering customers, if they are unable to pay, we are also giving them an option to pay later if the order value is less than Rs 2000.BigBasket spokesperson said in an email interaction.
The All India Online Vendor Association’s (AIOVA), an union of e-sellers, suggests that 70 percent of online shoppers opt for COD.
Most e-commerce orders come from rural India and these customers find it easier to pay in cash. We expect around 15-20 percent of the orders to return today as customers will not be able to pay for these orders in cash.AIOVA spokesperson’s comment over the phone
The spokesperson added that there could be a decline in the numbers of orders received by e-commerce companies as people might not be willing to shift immediately to other form of payments like wallet or credit cards. “It is yet to be seen how many will migrate to a prepaid payment method,” the spokesperson stated.
At ShopClues approximately 30 percent of orders are COD. Sanjay Sethi, CEO and co-founder of ShopClues welcomed the government’s move, but added that the company is bracing for a 20-25 percent dip in business, over the next 5-10 days. It’s looking for ways to mitigate the damage.
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Even though people have cash to give, but the buyer might not want to part with the money, which will lead to increased returns, so certainly business will be effected to some extent. We are working with courier partners to keep packages with them for three days before they return to us, so that we can attempt delivery once the new currency is in placeSanjay Sethi, CEO and Co-founder, ShopClues
He added that even though the demonetisation has put companies in a tight spot right now, it offers an opportunity to accelerate the move to digital payments.
“We will become better prepared to handle online payments and similarly customers will be more willing to accept online payments,” Sethi added.
E-commerce companies such as Flipkart and ShopClues are also opting for alternate payment modes such as card-on-delivery to help customers easily transition from cash to digital.
We urge our customers to opt for alternative payment modes such as card on delivery, internet banking, credit and debit cards, gift cards, and our easy and convenient PhonePe wallet.Flipkart spokesperson in an email interaction
Amazon too is working on alternatives to make doorstep payments easier for customers and will be introducing a variety of electronic payment options.
We will shortly reintroduce cash payment on delivery and provide an improved selection of payment methods, both online and at customers’ doorsteps, to offer a seamless experience.Amazon Spokesperson