The verdict in three sentences
Cash on delivery (COD) reassures and lifts conversion by 10 to 20%, but its 15 to 30% rejection/return rate destroys margin. Prepaid mobile money drops below 5% rejection but converts slightly less. A 20-30% deposit is the compromise: it halves rejections while keeping the reassurance effect.
Three models, three risk profiles
Offering COD is buying conversion with margin. Every refused parcel is the round-trip run + packaging + time: 2,000 to 4,000 FCFA lost with no sale. Prepaid removes that risk but requires client trust. A deposit shares the risk.
| Model | Conversion | Rejection rate | Cash-flow impact | Fraud risk |
|---|---|---|---|---|
| Full COD | +10-20% | 15-30% | Negative (cash to handle) | High |
| Prepaid mobile money | Baseline | < 5% | Positive (collected upfront) | Low |
| 20-30% deposit + COD balance | +5-12% | 7-15% | Neutral to positive | Medium |
COD isn't free: its "conversion" hides a rejection cost that can wipe out margin on serious clients.
The true cost of a refused order
Let's look at 2026 figures on 100 orders of 15,000 FCFA with 20% product margin (3,000 FCFA/order).
| Scenario | Delivered | Refused | Total rejection cost | Net margin |
|---|---|---|---|---|
| Full COD (25% refused) | 75 | 25 | 75,000 FCFA | 150,000 FCFA |
| Prepaid (4% refused) | 96 | 4 | 12,000 FCFA | 276,000 FCFA |
| 30% deposit (12% refused) | 88 | 12 | 36,000 FCFA | 228,000 FCFA |
Even with lower conversion, prepaid and deposit leave far more net margin than full COD, because each rejection costs 3,000 FCFA in run and packaging.
Mini case study
Zainab, a fashion e-seller in Lagos, was 100% COD with 28% rejection. On 200 orders/month at 15,000 FCFA, she lost 56 orders, about 168,000 FCFA in wasted runs. Imposing a 25% deposit via mobile money, her rejection rate falls to 11%. She loses a little conversion (-8% orders) but saves ~120,000 FCFA in rejections and collects part upfront. Monthly net margin: +140,000 FCFA.
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FAQ
Does COD really boost sales?
Yes, by 10 to 20% more conversion, because it reassures wary clients. But its 15 to 30% rejection rate can wipe out that gain in run costs.
How much does a refused order cost?
Between 2,000 and 4,000 FCFA: the rider's round trip, lost packaging and time spent, all with no sale at the end.
Won't a deposit scare clients off?
A 20 to 30% deposit stays moderate and halves the rejection rate. Serious clients accept it; those who refuse the deposit were often the ones who'd have refused the parcel.
Is prepaid mobile money risky?
No, it's the safest: collected before shipping, rejections under 5%, zero cash to handle. It just needs a climate of trust, built with reviews and a clear return policy.
Can you combine payment modes?
Yes, the ideal is to offer prepaid AND deposit+COD, nudging prepaid with a small discount. The store manages both flows automatically.
Let's talk about your project. We configure mobile money deposits and smart COD to save your margin. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
