The verdict in three sentences
Cash on delivery (COD) reassures but costs dearly: 15 to 30 % refusals/returns, cash tied up until delivery, and cash-collection fees of 2 to 4 %. Prepaid mobile money brings returns down to 5-8 % but loses about 10 points of initial conversion, since it demands immediate commitment. The winning answer in 2026 is not one or the other but the hybrid: a mobile money deposit that filters out non-serious orders, with the balance paid on delivery.
COD vs prepaid: the real cost of each model
COD is not free: on top of the high return rate come the lost delivery run, cash handling and the cash-flow gap. Prepaid secures the payment but filters out some hesitant buyers.
| Model | Return/refusal rate | Cash flow | Specific cost |
|---|---|---|---|
| COD (cash on delivery) | 15-30 % | Tied up until delivery | Cash collection 2-4 % + lost run on refusal |
| Prepaid mobile money | 5-8 % | Collected immediately | Transaction fee ~1 % + conversion -~10 pts |
| Hybrid (deposit + COD balance) | 8-12 % | Partly secured | Deposit fee ~1 %; filters fake customers |
Which model by average basket
The right choice depends mostly on basket value and the loss risk on a refusal. The higher the basket, the more a COD refusal hurts, and the more prepaid (or a deposit) is justified.
| Average basket | Recommendation | Reason |
|---|---|---|
| < 10,000 FCFA | COD acceptable | Limited loss on refusal, conversion first |
| 10,000-25,000 FCFA | Hybrid (30-50 % deposit) | Filters refusals without killing conversion |
| 25,000-50,000 FCFA | Prepaid recommended | Refusal too costly, protect the margin |
| > 50,000 FCFA | Prepaid near-mandatory | One refusal wipes out several sales |
| Known repeat customer | COD or flexible hybrid | Trust established, low risk |
The logic of the deposit
A mobile money deposit of 30 to 50 % transforms COD: a customer who paid a 5,000 FCFA deposit on a 15,000 FCFA order almost never refuses delivery. That deposit also covers the delivery run in case of residual refusal. It is the best compromise between COD reassurance and prepaid security.
Mini case study
Kofi sells clothing online in Accra, average basket 20,000 FCFA (~30 EUR) equivalent, 250 orders/month, 100 % COD with 25 % refusals. Each refusal costs a lost run of 1,800 FCFA. Monthly shortfall: 62 refused orders × (lost margin ~5,000 + run 1,800) = ~421,600 FCFA in losses/month, not counting tied-up cash.
He switches to hybrid with a 40 % deposit (8,000 FCFA paid by mobile money). Refusals drop to 9 %. New losses: 22 refusals × 1,800 (run, the deposit covers the rest) = 39,600 FCFA/month. Net gain: ~382,000 FCFA/month, and his cash flow now collects 40 % at order time.
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FAQ
Is COD really more expensive than prepaid?
Often yes. Between 15 and 30 % returns, the lost run on each refusal and 2 to 4 % cash-collection fees, COD eats margin far beyond mobile money's ~1 % fees.
Why does prepaid lower conversion?
Because it demands immediate commitment: about 10 points less first-purchase conversion, especially among customers who do not yet know the store.
What is the hybrid strategy?
A 30 to 50 % mobile money deposit at order time, balance paid on delivery. It brings returns to 8-12 % while keeping COD's reassurance.
At what basket should I require prepayment?
Generally above 25,000 FCFA, and almost always above 50,000 FCFA: a single COD refusal can then wipe out the margin of several sales.
How does the deposit protect my cash flow?
It collects 30 to 50 % immediately and covers the delivery run on residual refusal. You no longer tie up 100 % of the value until delivery.
Let's talk about your project. We set up COD, prepaid and hybrid mobile money deposits matched to your average basket. 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.
