Startups: How would you 'fix' the 'just for fun' orders for cash on delivery?

eCommerce in India is quite interesting. Most of the ecommerce websites offer cash on delivery - which allows the customers to pay for the goods they've ordered online only when they get the products in their hands. This model has worked in most of the cases, but in the recent times, major drawbacks of this model have come forward - CoD orders made 'just for fun'. This is how it works-

Customer places an order online. The eCommerce company takes all the pains to deliver the goods at the customer's address. The customer simply refuses to accept the product, denying that they ordered the product in first place. All the costs the company put in bringing the product to customer's home are wasted. Period!

I'm curious to know what could be the ways 'just for fun' orders made against cash on delivery? Posted in: #Startups & Business

Quick chat on phone could solve this problem. Call to customer before shipping and chat about if you can offer better product and about payment option whether they are going to pay in cash or credit.
I think this little conversation can help seller to identify if customer is genuine and also an opportunity for more sale☕

An e-commerce site i know has a much better system of tackling such issues.

Now anybody who wants to purchase or sell via the e-commerce site has to first register at that site and pay a fee as big as 20 k.

now as soon as this payment is made, the site awards the user a set of "points". lets say "1000".

now when the user browses through the site searching for an article which he wants to purchase, the site displays a list of dealers, selling that article.

allocated beside each dealer are a few points.(lets say 200) only the name of the dealer will be shown, and other details such as phone number, e-mail id, address,etc will be hidden.

if the user wants to know about these details, he has to obtain them at the cost of the points which had been allocated beside that dealer.

once he does this, then 200 points will be debited from the total points which the user originally had, (and it becomes 800).

once all the points are used up, the user has to renew them, by paying another sum of 20 k to the e-com site guys, and without points, the site is totally useless to him.

The people who are ordering "just for fun" are usually newer customers who might use a fake address.
An easy way to tackle this would to just call up the customer to verify the "COD" and also fix a suitable timing for the same.I also suggest a nominal (10-20 RS) extra charge for the COD so that only the most valuable customers will choose it in the first place.
The best way according to me is to STOP COD FOR FIRST TIME USERS.After the first order or after a customers spends a fix amount of money,they can enable the COD for his/her future orders.
Those who do it for "fun" can be reported and have their addresses blacklisted for the system,in this way they will lose their COD privileges.

Sounds COD for first time users would be a better way to address the issue; but I don't think it's workable. In fact, CoD is mostly preferred by first timers who aren't sure whether they'll really get what they've ordered online.

The real issue is that there were customers in UP who provided legit address and phone number and then just refused to accept the order.

I'm thinking on the lines of a membership fee. If you wish to order from COD; first become a member. There are companies that collect fee from households personally : GharPay is one of them.

How about paying a small X amount through CC/online-payment/mobile-sms verification (nominal like 200 for an order of say 5k+) and the rest on CoD.
This is safe for all involved in the transaction.
This way using multiple payment modes one can verify the order + even the people who do it for "fun" won't try.If they do,no refunds on the X amount.

If possible,they can charge this fee using a simple phone call/text message (charge 50 per call as convenience+confo fee).

For a product which has higher transport costs they can make verification+part payment compulsory (say a fridge worth 17k).

They can stop this once they have a "VERIFIED" customer.

I think a prospect who really wants to use CoD will be willing to pay an extra 2-5% depending upon his/her needs and the product.If it's urgent,they will definitely pay it willingly as they don't seem to have other viable alternatives.

If people are using legit addresses and contacts,it's easier to maintain a list and share it with other companies to blacklist them (after verification off-course)
This way they won't be able to order again and they can get it unlisted after paying a fine which goes to the company that reported them.

Escrow is another method where something like 1-5% can be charged for higher-transactions for offering a convenient and safe transaction.