COD verification is the process of confirming a customer's intent to receive and pay for a cash-on-delivery order before it is dispatched. The goal is simple: catch fake, impulsive, or accidental orders before they ship, so you don't pay for forward and return logistics on orders that were never going to convert.
In India, COD still accounts for over 50% of all ecommerce transactions. The trust and convenience it offers customers comes with a cost for sellers - COD orders have RTO (return to origin) rates of 20-30%, compared to under 2% for prepaid orders. A significant portion of these RTOs are preventable. They come from customers who entered a wrong number, placed an order by accident, changed their mind within hours, or never intended to pay at all.
COD verification catches these orders before they enter your logistics pipeline.
The basic flow is the same regardless of method:
The verification typically happens within minutes of order placement, while the customer's intent is still fresh. Orders that go unverified after a set time window (usually 24-48 hours) are flagged for manual review or automatic cancellation.
An automated phone call is placed to the customer immediately after the COD order is placed. The customer hears their order details and presses 1 to confirm or 2 to cancel.
Pros: High reach, works on any phone, no smartphone required. Immediate response. Simple and familiar for customers in Tier 2-3 cities.
Cons: Some customers don't pick up unknown numbers. Limited to binary confirmation, can't collect updated address or handle objections.
Cost: ₹1-3 per call.
An OTP (one-time password) is sent to the customer's registered mobile number via SMS. The customer enters the OTP on a confirmation page to verify the order.
Pros: Validates that the phone number is real and active. Familiar mechanism - customers use OTPs daily for banking.
Cons: Adds friction to checkout. Some customers may not complete the OTP step, leading to a drop in confirmed orders (not just fake ones).
Cost: ₹0.20-0.50 per SMS.
A WhatsApp message is sent to the customer with their order details and quick-reply buttons - "Confirm Order" or "Cancel Order." The customer taps a button to respond.
Pros: 95%+ open rates. Customers can also update their address or ask questions in the same thread. Feels conversational, not transactional. Can include product image for visual confirmation.
Cons: Requires WhatsApp Business API. Customer must have WhatsApp (95%+ coverage in India, so this is rarely an issue).
Cost: ₹0.70-0.80 per marketing conversation (Meta's India pricing).
An AI voice agent calls the customer and has a brief conversation, confirming the order, verifying the delivery address, and offering to convert the order to prepaid with a small incentive. Unlike IVR, the AI agent understands natural language, handles interruptions, and can respond to questions.
Pros: Highest confirmation rate. Can verify address, catch fake orders, and attempt COD-to-prepaid conversion in the same call. Handles Hindi, English, and Hinglish. Feels like a human caller.
Cons: Higher cost per call. Overkill for low-value orders.
Cost: ₹3-8 per call.
For a detailed comparison of when to use AI voice agents vs chatbots for verification and other use cases, see our chatbot vs voice agent guide.
The numbers vary by method and business, but the range is consistent across industry data:
For a mid-size brand doing 1,000 COD orders/month with 25% RTO, even a 15% reduction means 37 fewer returned orders per month. At ₹200 per RTO (forward + return shipping + packaging), that's ₹7,400/month saved, and that's before counting the recovered margin on orders that would have been lost.
For a comprehensive playbook on reducing RTO across every stage of the order lifecycle, see our guide to reducing RTO in ecommerce.
Not every COD order needs verification. Over-verifying can slow down dispatch and annoy genuine customers. A smart approach is risk-based verification:
Always verify: First-time customers with COD orders above ₹1,000. Orders from pin codes with historically high RTO rates. Orders flagged by fraud detection (mismatched name/address, multiple orders from same IP).
Skip verification for: Repeat customers with a history of successful deliveries. Prepaid orders (obviously). Low-value COD orders under ₹300 where the verification cost approaches the shipping cost.
Most WhatsApp marketing platforms and voice agent tools let you set rules for which orders trigger verification automatically.
On Shopify, COD verification is typically set up through a third-party app or WhatsApp/voice platform that integrates with your store. The flow:
For step-by-step guidance on converting verified COD orders to prepaid, see our COD-to-prepaid conversion guide.
The new age of AI-first customer engagement starts here
