It is 7pm in Sharjah. A delivery driver climbs three floors and knocks on the door.

The customer opens it, looks at the parcel and says: "Sorry, I don't want it anymore."

The door closes. The driver takes the parcel back.

The customer paid nothing. The shop paid for everything: the product, the packing, the delivery, and now the trip back.

I have seen this happen thousands of times in 17 years of trade, with our own brands and with the more than 500 sellers on Ecomplug.com. And new sellers always ask me the same thing: should I stop offering cash on delivery?

My answer is no. But you need to handle it smartly.

First, what are we talking about?

  • Cash on delivery (COD): the customer orders online and pays the driver when the parcel arrives.
  • Prepaid: the customer pays online, by card or Apple Pay, before the parcel is sent.

Both have a place. The trick is knowing what each one really costs you.

Why customers still choose cash

Surveys say fewer people in the Gulf like paying cash online. A Checkout.com study found that only about 1 in 10 shoppers in Saudi Arabia, the UAE and Kuwait choose cash when shopping online.

So why do many small shops still get most of their orders as cash on delivery?

Because it depends on who you are buying from. When people shop from a big store they know, they pay by card without thinking. When they buy from a shop they saw in an Instagram ad five minutes ago, they want to see the product first.

Choosing cash is really the customer saying: "I don't know you yet."

That is why removing cash on delivery can hurt a new shop's sales. But keeping it without any control can hurt its profit.

What cash on delivery quietly costs you

1. Customers who say no at the door

When a customer pays online, the decision is made. With cash on delivery, she can change her mind right at the door, or simply not be home. Every time that happens, you pay for delivery twice and get nothing.

2. Products stuck on the road

A refused parcel can spend days travelling back to you. During that time it is not on your shelf, and you cannot sell it to someone else. Sometimes it comes back damaged.

3. Extra fees

Delivery companies charge a small fee to collect the cash for you. It looks small, but you pay it on every order.

4. Waiting for your money

With a card payment, the money reaches you quickly. With cash, the driver collects it, the delivery company counts it, and only later does it reach your account. Until then, you cannot use it to buy more stock or run more ads.

Let's look at real numbers

Imagine you sell 100 orders at AED 150 each. Here is a simple example (the costs are just to show the idea):

  • The product costs you AED 60
  • Delivery costs AED 20
  • Ads cost AED 30 per order

All 100 customers pay online: everyone receives their order. After all costs, you keep about AED 3,600.

All 100 customers choose cash, and 25 say no at the door: you only get paid for 75 orders, but you still paid delivery for all 100, plus the trips back and the cash fees. You keep about AED 1,000.

Same product. Same ads. Less than a third of the profit, and the money arrives later.

But be careful. If you only accepted online payment, maybe you would not get 100 orders at all. Maybe only 60. So the answer is not "stop cash on delivery." The answer is: keep the sales it brings, and cut the losses.

7 simple ways to protect your profit

  1. Confirm every order before you ship it. A quick WhatsApp message or call: "Is this your order? Is the address right? When are you home?" This alone stops many refusals.
  2. Give a small reward for paying online. Free delivery or a small discount. Many customers are happy to pay by card if you give them a reason.
  3. Be careful with expensive orders. Keep cash on delivery for new customers and smaller orders. For expensive items, or customers who refused before, ask them to pay online first.
  4. Deliver fast. The longer a customer waits, the more time she has to change her mind. Next-day delivery is one of the best ways to reduce refusals.
  5. Pick delivery companies that deliver on the first try. A slightly more expensive courier that calls ahead can save you a lot of money. We work with more than 20, including Aramex, Naqel, J&T Express, Zajil and Emirates Post, because each one is stronger in different cities.
  6. Watch which orders get refused. Check every week: which products, which cities, which ads? If one ad brings many refusals, it is probably promising too much.
  7. Know when your cash arrives. Keep track of every cash payment and make sure you get paid on a fixed schedule.

The real goal

Think of cash on delivery as the price of being new. The customer picks cash because she does not trust you yet.

Deliver on time. Send exactly what the photo showed. Make exchanges easy. Do that, and next time she will probably pay by card.

The best sellers I know use cash on delivery to win the first order, and good service to win the second one.

That is also why we built Ecomplug.com. Sellers get their stock stored close to their customers, trusted delivery partners, and their cash payments sent back to them safely, wherever they are. We handle everything after the order, so they can focus on earning their customers' trust.

Back to that door in Sharjah

Same customer, same order. But this time she got a WhatsApp message confirming it. She was offered free delivery to pay online. The parcel arrived the next morning, when she was home.

Maybe she paid by card. Maybe she paid cash. Either way, this time she kept the parcel.

Cash on delivery is not the problem. Cash on delivery without a plan is.