Cash on delivery in Egypt: Reducing rejected orders and returns
Cash on delivery (COD) is still one of the most widely used payment methods in Egyptian e-commerce. Estimates vary from source to source: recent estimates by payment service providers put it at around 40 to 45% of transactions, while older reports cited much higher percentages. Whatever the exact number is, most stores cannot do without it. The problem is that it is more expensive for the merchant than electronic payment. A BCG report indicated that the cost of COD to merchants in Egypt is higher than cards and digital wallets. Therefore, the goal is not to cancel it, but to manage it so that it does not eat up the profit margin.
The real cost per order
An order rejected at the door costs you more than the shipping price. Add up the following items, then multiply their sum by your rejected-order rate to find out how much COD is actually costing you.
Outbound shipping, and return shipping if charged
Cash collection fees charged by the shipping company
Delayed arrival of cash in your account
Customer service time spent on follow-up and calls
A product that may be damaged or delayed in resale
Measure the problem before you fix it
Start with four indicators, and break them down by governorate, product category, order value, and traffic source (ad, search, or social). You may discover that the problem is with one ad or one area, not the entire store.
Percentage of orders refused on delivery
First-attempt delivery success rate
Average number of days until cash arrives from the shipping company
Cancellation rate before shipping
Confirm the order before shipping
Send a WhatsApp or SMS message with a one-tap confirmation link, or call for expensive orders. Do not ship the order before confirmation, and set a clear deadline (for example 24 hours) after which the order is automatically cancelled. Confirmation delays shipping a little, but filters out non-serious orders early at a small cost.
Assess the risk of each order
Set simple rules to start with, then review them monthly. When one of the following signals appears, choose one action: a confirmation call, a deposit request, or hiding the COD option for this order only. Apply the rules to behavior, not to the residential area alone, so you don't treat serious customers unfairly.
A customer's first order with a high value
Incomplete or unclear address
A phone number or address that has refused orders before
Multiple simultaneous orders to the same address under different names
A deposit for expensive orders
Request an advance payment via e-wallet, InstaPay or Fawry for orders above a limit you set, and for made-to-order products. A customer who has paid part is significantly less likely to refuse the order, and part of any loss is covered.
Encourage electronic payment rather than forcing it
Test each incentive on a segment of customers before rolling it out, and compare the result against profit margin, not just the number of orders.
Offer a small discount or free shipping for prepayment
Offer more than one method
Card, wallet, installments and COD.
Write the return policy clearly near the checkout button
Lack of trust is the main reason customers prefer cash.
Improve address data
Many failed deliveries come from an address the courier could not reach, not from the customer refusing.
Make governorate, city, and district dropdown lists instead of free text
Add a field for the nearest landmark
Validate the mobile number (11 digits starting with 010, 011, 012 or 015)
Allow an alternative number and a convenient delivery time
Reconcile cash with the shipping company
Ask the shipping company for a report on every collected shipment, and automatically match it against the expected orders in your system. Track shipments with delayed settlement, and document a process for handling discrepancies. Without this reconciliation, part of your profit is stuck without you noticing.
What to build into your store or app
An order confirmation flow via link or OTP before shipping
Risk rules editable from the dashboard
A deposit option linked to local payment gateways
API integration with the shipping company for shipment status and collection reports
A dashboard for refusals, deliveries and settlement delays
Frequently asked questions
Should I stop cash on delivery completely?
Usually not. Stopping it reduces costs, but it may lose you a large segment of customers. It is better to restrict it on high-risk orders and encourage alternatives.
What is an acceptable refusal rate?
There is no number that works for every store, because it varies by product and region. Compare against yourself month by month, and focus on reducing it gradually.
What do I do with a customer who refused two orders?
Record their number and address, and ask for prepayment on future orders instead of blocking them permanently.
Sources
BCG via Enterprise
Cash still popular in Egypt and MEA (September 2025).
dLocal
Egypt payment methods.
PS Market Research
Egypt e-commerce market.
Need a Moodle platform or eCommerce app?
We'll send you a detailed proposal within 24 hours