Cash on delivery and cashflow in 2026: data and trends

Cash on delivery is no longer as dominant as it was a few years ago. Customers are increasingly getting used to paying by card, Apple Pay, Google Pay or bank transfer. Even so, COD has not disappeared from e-commerce. In many segments it is still an important part of shopping behaviour and for e-shops it represents a significant factor in managing cash.

Current trends show the share of cash-on-delivery payments falling by roughly 4 to 6 percentage points year on year. That is a visible shift towards online payments. Yet in some categories – especially fashion, jewellery, accessories and products with a high share of impulse purchases – COD still accounts for around 30 to 40 % of orders.

For those e-shops, COD is not just a payment method. It is a topic of its own covering cashflow, logistics, administration and risk.

COD is falling, but its position is still strong

Online payments are growing mainly because they are more convenient for the customer. The customer pays immediately, the order is processed faster and the e-shop gets its money sooner. From the merchant's point of view that is the ideal scenario.

COD nevertheless remains popular with customers who:

• do not want to pay in advance,
• do not trust a new e-shop,
• are ordering from an e-shop for the first time,
• want to be sure the parcel really arrives,
• are used to paying on delivery,
• buy on impulse and do not want to enter payment details.

With COD the customer perceives less risk. The e-shop, however, takes on more of it. It sends the goods without having the money in its account straight away.

Why COD is a problem for cashflow

With an online payment, the e-shop usually has the money available quickly. With COD the situation is different. The money is first collected by the carrier or the pickup point, then processed and only afterwards sent on to the e-shop.

That means a time gap can open up between sending the order and the money actually landing in the account.

This gap can be a problem especially for e-shops that have:

• a high share of COD,
• fast order growth,
• a lot of stock tied up in the warehouse,
• low margins,
• expensive logistics,
• seasonal swings,
• a higher share of uncollected shipments.

At larger order volumes, thousands or even tens of thousands of euros can be tied up in COD payments. The money is „on its way“, but the e-shop does not have it available yet. At the same time it has already had to pay for goods, packaging, warehousing, transport, wages or marketing.

The biggest risk: uncollected COD parcels

The biggest problem with COD is not just the delayed income. The biggest risk is an uncollected shipment.

With payment in advance the customer has already paid. With COD they can simply decide not to collect the parcel. The e-shop then pays for transport both ways, for handling costs, and often has to deal with putting the goods back into stock as well.

An uncollected COD parcel can happen for various reasons:

• the customer changed their mind,
• they ordered a similar product elsewhere,
• they forgot about the shipment,
• they were unavailable,
• the price on delivery put them off,
• the order was an impulse buy,
• delivery took too long.

For an e-shop it is important to monitor not only the share of COD orders, but also the share of uncollected COD parcels. That is what really shows how big a financial risk COD brings.

Segments where COD still plays a big role

COD matters most in segments where customers often buy based on feeling, size, appearance or trust.

Typically that means:

• fashion,
• footwear,
• jewellery,
• accessories,
• cosmetics,
• household products,
• gift items,
• seasonal ranges.

In fashion and jewellery, COD can still account for 30 to 40 % of orders. The reason is simple. The customer wants to keep a sense of control. With a more expensive or more personal product they often do not want to pay in advance, especially if they do not know the e-shop yet.

In technical segments, with repeat purchases or with well-known brands, on the other hand, the share of online payments is usually higher.

How COD affects financial planning

If an e-shop has a large share of COD orders, it has to factor that into its financial planning. Looking only at the revenue shown in the e-shop administration is not enough.

What matters is tracking:

• how many orders are paid in advance,
• how much money is tied up in COD payments,
• when carriers send collected COD money on,
• how long on average it takes for COD money to reach the account,
• what share of shipments goes uncollected,
• what uncollected COD parcels cost,
• how much money is needed for stock and marketing before the payments come in.

On paper an e-shop can have high revenue and in practice still have tight cashflow – especially during growth or in season, when it has to buy in more goods while the money from COD comes back with a delay.

How to reduce the negative impact of COD on cashflow

The goal does not have to be scrapping COD altogether. In some segments that could hurt the conversion rate. It is better to manage COD and gradually move customers towards online payments.

These measures can help:

1. Make paying in advance more attractive

The customer needs a reason to choose an online payment. It can be cheaper shipping, faster order processing or an easier complaints procedure.

Even a small price advantage can change customer behaviour.

2. Charge a fair fee for COD

COD has real costs for an e-shop. It is therefore natural for it to be more expensive than paying by card. The important thing is to communicate that clearly and transparently.

The customer should see that COD is an extra service, not something that comes free of charge.

3. Restrict COD on risky orders

Not every order has to have the same payment options. With expensive orders, repeated non-collection or suspicious behaviour, an e-shop can offer payment in advance only.

Rules like these can significantly cut the cost of uncollected shipments.

4. Remind the customer about the delivery

Many COD parcels go uncollected simply because the customer forgets. Automatic SMS messages, e-mail notifications or reminders before delivery all help.

Good communication can reduce the number of uncollected shipments without the e-shop having to change its payment methods at all.

5. Keep an eye on carriers and pickup points

Not all carriers perform the same when it comes to COD. There can be differences in delivery speed, delivery success rate, communication with the customer and also in how quickly COD money is paid out.

For cashflow it is important to know which carrier sends COD money on fastest and which one generates the most uncollected shipments.

6. Motivate repeat customers to pay online

If a customer has bought from you several times and always collected the order, it may be the right moment to offer them a benefit for paying in advance.

With repeat customers trust is higher, so changing their payment habits is easier.

7. Evaluate COD separately

COD should not be just one line among your payment methods. It deserves reports of its own.

Track above all:

• the share of COD in your orders,
• the share of COD in your revenue,
• the average value of a COD order,
• the average time it takes for COD money to be paid out,
• the number of uncollected COD parcels,
• the cost of uncollected COD parcels,
• the differences by country, carrier and category.

Only this data will show whether COD is a healthy payment method for your e-shop or a hidden problem.

COD is not the enemy, but it has to be managed

COD still has its place. For some customers it is a way of building trust in an e-shop. For some segments it is a payment method that helps keep conversions up.

The problem arises when an e-shop does not monitor COD and has no idea what it really costs.

If COD accounts for 30 to 40 % of orders, it is not a detail. It is a significant part of the business. Every improvement in payout speed, delivery success rate or in reducing uncollected shipments can have a direct impact on cashflow.

Conclusion

The year 2026 confirms a clear trend: cash on delivery is gradually declining, but it has not disappeared. Its share falls by roughly 4 to 6 percentage points year on year, yet in some segments it still accounts for a significant part of orders.

For e-shops it is therefore important not to see COD merely as a payment option. It is a factor that influences cashflow, logistics, risk and the customer experience.

The best results are achieved by e-shops that do not scrap COD without thinking, but start managing it based on data. They track the share of COD, uncollected shipments, payout speed and customer behaviour by segment.

COD can still be useful. But only when the e-shop knows exactly what it costs, what risk it brings and how it affects its cashflow.