The verdict in three sentences
Cash on delivery (COD) is a great conversion booster in a distrustful market, but it's also the open door to ghost parcels: 10 to 25 % come back unpaid depending on the city, and each round trip costs 2,000 to 4,000 FCFA. Prepaid secures the money but scares off cautious buyers. The winning solution is rarely one or the other: it's a deposit + prepaid incentive mix that captures conversion without absorbing the cost of returns.
Why COD seduces and costs a lot
COD removes the fear of paying a stranger: the customer only pays on receipt. As a result, conversion can be 20 to 40 % higher than all-prepaid in some niches. But it shifts all the risk onto you: cancelled impulse order, unreachable customer, fake address, or simply nobody home. Every refused parcel means the wasted trip, the handling and the product tied up.
Prepaid flips everything: zero ghost parcels, cash collected upfront, but lower conversion because it demands trust. In between, the mobile money deposit (pay 20-30 % at order, the rest on delivery) filters non-serious orders while keeping conversion.
2026 comparison: COD vs prepaid vs deposit
2026 order of magnitude. Rates vary widely by niche, city and customer relationship quality.
| Method | Relative conversion | Ghost-parcel rate | Risk cost | Cash flow |
|---|---|---|---|---|
| Full COD | Baseline (highest) | 10-25 % | Wasted trip + tied-up product | Collected late |
| 20-30 % deposit + balance on delivery | -5 to -10 % vs COD | 3-8 % | Low (non-refunded deposit) | Partial at order |
| Full prepaid | -20 to -40 % vs COD | ~0 % | Near-zero | Collected upfront |
| Prepaid with 5 % discount | -10 to -20 % vs COD | ~0 % | Discount cost | Collected upfront |
The second table sizes the cost of ghost parcels by city and the effect of the mix.
| City | Typical COD refusal rate | Avg round-trip cost | Loss / 100 COD orders | Recommended lever |
|---|---|---|---|---|
| Dakar | 10-15 % | 2,000-3,000 FCFA | ~30,000 FCFA | Deposit on outskirts |
| Abidjan | 12-18 % | 2,500-3,500 FCFA | ~45,000 FCFA | Deposit + call confirmation |
| Accra | 15-22 % | 2,500-4,000 FCFA | ~65,000 FCFA | Incentivised prepaid (5 % off) |
| Lagos | 18-25 % | 3,000-4,000 FCFA | ~85,000 FCFA | Prepaid mandatory on large basket |
The tipping point toward prepaid
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The right setting isn't ideological, it's numeric. Set a basket threshold above which prepaid (or a deposit) becomes mandatory — because a ghost parcel at 150,000 FCFA hurts far more than at 15,000 FCFA. Add a call/WhatsApp confirmation before dispatch on high-refusal zones, and a 5 % discount for those who pay upfront: often, the savings on returns more than fund the discount.
Mini case study
Kwame runs a store in Accra, 200 orders/month on COD, average basket 40,000 FCFA, refusal rate 20 %. Ghost-parcel cost: 40 parcels x 3,000 FCFA per trip = 120,000 FCFA/month, plus the tied-up product. He introduces a 25 % deposit payable by mobile money at order: the refusal rate drops to 6 %, i.e. 12 ghost parcels versus 40. New cost: 12 x 3,000 = 36,000 FCFA/month. Saving: 84,000 FCFA/month, with conversion barely dented since the deposit stays moderate and refundable as store credit.
FAQ
Does COD really sell more? Yes, in a distrustful market it can add 20 to 40 % conversion versus all-prepaid. The problem isn't the sale, it's the cost of the 10 to 25 % of parcels that come back unpaid.
How do I cut ghost parcels without killing conversion? A 20-30 % mobile money deposit filters non-serious orders while reassuring: refusals often fall from 20 % to under 8 %.
Should I refund the deposit on cancellation? Offer store credit rather than a cash refund: the customer keeps their money as credit, you limit the loss and keep the relationship.
When should prepaid become mandatory? Above a basket threshold (often 100,000-150,000 FCFA) or in high-refusal zones. A 5 % discount for upfront payment softens the switch.
Is call confirmation worth it? On zones above 18 % refusal, a call or WhatsApp message before dispatch weeds out ghost orders and saves far more than the time spent.
Let's talk about your project. We configure your COD / deposit / prepaid mix, with tipping thresholds and pre-dispatch confirmation. 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.
