For Online Sellers

COD vs Prepaid Calculator: What Cash on Delivery Really Costs You

Free tool · Updated October 2, 2026 · By CouponTalk · Reviewed by CouponTalk Expert Reviews on October 2, 2026

Your result

Enter your measurements to see your result.

Quick answer

Cash on delivery costs more than its COD fee because more COD orders are refused and shipped back (RTO). With a ₹35 COD fee, 25% COD returns and ₹60 each way, an average COD order costs ₹56. A prepaid order with a ₹20 discount, 2% payment fee and 5% returns costs ₹40. A prepaid discount of up to ₹36 would still leave you better off here.

How to use this calculator

Take your COD and prepaid RTO rates from the last 90 days of orders.
Enter courier charges for forward and return trips.
Try different prepaid discounts to see how much you can offer before prepaid stops being cheaper.

Formula

COD cost per order = COD fee × (1 − COD RTO rate) + COD RTO rate × (forward + return shipping)

Prepaid cost per order = prepaid discount + gateway fee % × order value + prepaid RTO rate × (forward + return shipping)

Forward shipping on delivered orders is the same for both, so it is not counted twice.

RTO rates depend on your category and buyer pincodes. Use your own last 90 days of order data.

Frequently asked questions

Why are COD return rates higher?

Buyers who haven't paid can refuse the parcel at no cost, so impulse orders and fake orders come back more often.

Is the COD fee charged on returned orders?

Most couriers charge the COD fee only on delivered orders, which is how this calculator works. Check your courier agreement.

How do I reduce COD returns?

Confirm COD orders by call or WhatsApp before dispatch, block pincodes with high RTO, and offer a small prepaid discount.

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