Cash on Delivery for Online Shops in Bangladesh: Full Guide

Ask any Bangladeshi shopper how they want to pay for something they ordered from a Facebook Page or a website, and most will say "cash on delivery". If you run a cash on delivery online shop in Bangladesh, COD is not just a payment option: it shapes your cash flow, your returns, your courier choice and your profit on every order.

This guide explains how cash on delivery works end to end, what it really costs, where the risks are, and how to decide when to ask for an advance or add online payment.

Why cash on delivery still rules online shopping in Bangladesh

Online shopping has grown fast, and mobile wallets like bKash and Nagad are everywhere. Yet when buying from a shop they haven't used before, most customers still want to see the parcel before they hand over money.

The reasons are simple:

• Trust. A new customer doesn't know you. Paying at the door removes the fear of paying for something that never arrives.
• Checking the product. Customers want to see that the colour, size and quality match the photos.
• Habit. Many people have always paid for online orders in cash and see no reason to change.
• No card. Plenty of customers don't have a debit or credit card, and some don't want to send money to a personal bKash number.

For a seller, this means COD is usually the default. The question is not whether to offer it, but how to run it well.

How cash on delivery works, step by step

Here is the full journey of a typical COD order for a small online shop using a courier merchant account.

1. The customer places an order. On your website checkout, or by sending their name, phone and address in Messenger or WhatsApp. No money changes hands yet.
2. You confirm the order. You check the details and, for many orders, call or message the customer to confirm the product, size, total and delivery time.
3. You pack the parcel. Write the order number and the exact amount to collect on the parcel or the courier label.
4. You book the courier. You create the parcel in your courier's merchant panel with the customer's name, phone, address and the COD amount. The courier picks it up from you, or you drop it at a hub.
5. The courier delivers and collects the cash. The delivery person hands over the parcel and collects the amount you entered. If the customer refuses, the parcel goes back as a return.
6. The courier pays you. After delivery, the courier deducts its delivery charge and COD charge from the collected cash and sends the rest to your bank account or mobile wallet on its payout schedule.
7. You close the order. You mark the order delivered (or returned) in your records, so your sales and stock numbers stay correct.

A worked example

Suppose a saree shop in Mirpur sells a saree for ৳2,000 to a customer in Chattogram, with an outside Dhaka delivery charge of ৳130 shown at checkout. The customer pays ৳2,130 at the door.

The courier then deducts its own delivery fee for that parcel and its COD charge, and transfers the remaining amount to the shop. If the courier's fee happens to match the ৳130 the customer paid, the shop receives roughly ৳2,000 minus the COD charge. If the courier's real cost is higher than what you charge the customer, the difference comes out of your margin.

These numbers are only an example. Check your courier's current rate card for its real charges.

What cash on delivery really costs you

COD feels free because the customer pays, but several costs sit inside every order.

Courier delivery charge

Couriers usually price by area (inside Dhaka, Dhaka suburbs, outside Dhaka) and by weight. Heavier parcels cost more. You either pass this to the customer as a delivery charge, absorb it, or split it. We cover this in detail in how to set delivery charges inside and outside Dhaka.

COD or cash handling charge

Many couriers take a small percentage of the cash they collect for you, often around 1%, sometimes calculated after deducting the delivery fee. It sounds small, but on a ৳3,000 order, 1% is ৳30 on every parcel. Read the courier's terms to see exactly how it is calculated.

Return costs

When a customer refuses a COD parcel, you lose more than the sale. Depending on the courier, you may pay a return charge, and you have already paid for packaging and spent time on the order. Some products come back damaged or can't be resold as new.

Hidden costs

• Packaging: poly mailers, boxes, bubble wrap, tape and labels.
• Phone and data: confirmation calls and messages add up.
• Time: every refused parcel is time you could have spent selling.
• VAT and tax: courier charges may be shown excluding VAT, so check the final invoice.

Cash flow: the hidden challenge of COD

With cash on delivery, you pay for stock, packaging and sometimes advertising before the customer pays you. Then you wait for delivery, and then for the courier payout. That gap can be several days or more.

For a small business, this matters. Suppose a gadget page in Chattogram spends ৳50,000 on stock for an Eid campaign. Until parcels are delivered and the courier pays out, that money is locked up. If 10% of parcels come back, part of it stays locked in returned stock.

Ways to keep cash flow healthy:

• Know your courier's payout schedule and choose a payout method that suits you, such as bank or mobile wallet, if the courier offers a choice.
• Reconcile every payout. Match each payment against your delivered orders, so you notice missing or wrong amounts quickly.
• Don't overstock before a season. Buy in rounds based on real orders, especially for Eid and Puja.
• Track returns separately. A returned parcel is stock to put back on sale, not a loss to forget.
• Keep a small cash buffer for the days between spending and getting paid.

The risks of COD and how to manage them

The biggest risk of cash on delivery is the order that is never accepted. A customer orders on impulse, changes their mind, isn't reachable, or gave a fake number. You pay the delivery and return costs and get nothing.

Other risks include:

• Wrong or incomplete addresses, which delay delivery and annoy customers.
• Surprise at the door, when the customer didn't expect the delivery charge or the total.
• Product mismatch, when the item looks different from the photo, leading to refusal.
• Fraud, such as competitors or pranksters placing orders they never mean to accept.

Most of this can be reduced with simple habits: confirm orders by phone or message, show the full price and delivery charge before the order is placed, use honest photos, and keep a record of phone numbers that have refused parcels before. We go deeper in our guide on how to reduce fake orders in cash on delivery.

Partial advance: when to ask for money upfront

A partial advance means the customer pays part of the amount, often just the delivery charge, through bKash or Nagad before you ship. The rest is collected as cash on delivery.

Asking for an advance on every order usually costs you sales, because many customers won't do it. Used carefully, it protects you on risky orders.

Good cases for a partial advance:

• High-value items, such as phones, gadgets, gold-plated jewellery or bridal wear.
• Custom or made-to-order products, which you can't resell if refused, for example name-printed gifts or tailored clothes.
• Outside Dhaka orders from new customers, where the delivery and return cost is higher.
• Phone numbers with a history of refused parcels.
• Bulky or heavy items, where the courier charge is large.

How to ask without losing the customer:

1. Explain why in one friendly sentence: "Since this is a custom order, we take the delivery charge in advance."
2. Make the amount small and clear, for example only the delivery charge.
3. Give your official payment number, and send a confirmation once you receive it.
4. Show the remaining COD amount clearly, so the customer knows what to pay at the door.

When to add online payment

Online payment (bKash, Nagad, cards through a payment gateway) doesn't replace COD in Bangladesh. It sits next to it. Adding it makes sense when:

• Many customers ask to pay by bKash or card already, and you handle it manually with screenshots.
• You sell to repeat customers who trust you and want a quicker checkout.
• You sell digital products, pre-orders or custom items, where payment upfront is normal.
• Your average order value is high, so returns are expensive.
• You have a trade license and business documents, which payment gateways usually require for a merchant account. See trade license, DBID and e-TIN for online business.

A sensible path for most shops: start with cash on delivery, use manual bKash or Nagad advances for risky orders, and add a proper payment gateway once volume and paperwork are in place.

A simple COD checklist for your online shop

• Show product price, delivery charge and total before the customer orders.
• Collect name, a valid mobile number and a full address with area.
• Confirm orders by call or message, at least for new customers and high-value orders.
• Write the order number and exact COD amount on every parcel.
• Choose a courier based on coverage, charges and payout schedule. Our guide to choosing a courier service lists what to compare.
• Reconcile each courier payout against delivered orders.
• Mark returns and put the stock back on sale.
• Review your return rate every month and adjust your rules.

Start selling with EasyMall

EasyMall was built for cash on delivery shops in Bangladesh. When you sign up, you get:

• A store website with a cash on delivery checkout that collects name, a validated Bangladeshi mobile number and full address.
• Inside Dhaka and Outside Dhaka delivery charges you set, plus an optional free delivery amount.
• An order confirmation page that shows the order number and the total to pay on delivery.
• An orders dashboard with pending, confirmed, delivered, cancelled and returned statuses, and search by name, phone or order number.
• Stock that goes down on each order and comes back on cancel or return.

Courier booking (Steadfast, Pathao, RedX) and online payments with bKash, Nagad and cards are coming soon. You can create your free store website, free forever with no card or bKash needed.