The verdict in three sentences
Full cash-on-delivery filters serious buyers poorly: 25 to 45% of drops fail or return, each failure costing 1,000 to 3,000 FCFA in re-delivery. A mobile-money deposit of 500 to 2,000 FCFA (or 10 to 20% of the basket) drops the failure rate to 8-18%. The slight conversion dip (-5 to -12%) is far outweighed by logistics savings and lower cash shrinkage.
Why pure COD destroys your margins
Under cash-on-delivery, nothing commits the buyer until the courier rings the doorbell. The result: ghost orders, fake addresses, unreachable customers, refused parcels. Each failure stacks the outbound trip cost, the return cost, tied-up stock and sometimes shrinkage on handled cash.
| Pure COD indicator | 2026 order of magnitude | Impact |
|---|---|---|
| Failure / return rate | 25 - 45% | Undelivered parcels |
| Re-delivery cost | 1,000 - 3,000 FCFA | Per failed drop |
| Cash shrinkage | 1 - 3% | Cash handling |
| Tied-up stock | 2 - 6 days | Per parcel in transit |
| Unreachable customers | 10 - 20% | Wrong numbers |
On 100 orders at 15,000 FCFA, a 35% failure rate means 35 lost trips, up to 105,000 FCFA of re-delivery burned, not counting frozen cash.
Deposit vs pure COD vs full prepay
The deposit is the ideal compromise in markets where card trust remains low: it commits the buyer without demanding full prepayment, which scares off part of the customer base.
| Model | Failure rate | Conversion | Cash shrinkage | Relative net margin |
|---|---|---|---|---|
| Full COD | 25 - 45% | Baseline | 1 - 3% | Base |
| Deposit + COD | 8 - 18% | -5 to -12% | 0.5 - 1.5% | +8 to +15 pts |
| Full prepay | 3 - 8% | -15 to -30% | ~0% | +5 to +12 pts |
The deposit almost always wins: it more than halves failures while preserving most of conversion. Full prepay is safer but costs too much conversion in many niches.
City-by-city comparison
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Dynamics vary with local mobile-money maturity. 2026 order of magnitude.
| City | Pure COD failure | Failure with deposit | Re-delivery cost |
|---|---|---|---|
| Lagos | 35 - 45% | 12 - 18% | 1,500 - 3,000 FCFA |
| Abidjan | 25 - 38% | 8 - 15% | 1,000 - 2,500 FCFA |
| Nairobi | 20 - 32% | 8 - 14% | 1,300 - 2,800 FCFA |
| Dakar | 25 - 40% | 8 - 16% | 1,000 - 2,500 FCFA |
Mini case study
Ibrahim, who runs a ready-to-wear shop in Abidjan, handles 300 orders per month at a 20,000 FCFA average basket. Under pure COD, his failure rate is 35%, i.e. 105 failed trips at 2,000 FCFA re-delivery = 210,000 FCFA/month lost. He introduces a 2,000 FCFA deposit via mobile money. The failure rate drops to 12%, i.e. 36 failed trips = 72,000 FCFA. Logistics saving: 138,000 FCFA/month. He loses about 8% conversion (24 orders), but those avoided orders were mostly non-serious buyers. Estimated net gain: over 100,000 FCFA per month.
FAQ
How much deposit should I ask for? A deposit of 500 to 2,000 FCFA or 10 to 20% of the basket is enough to filter non-serious buyers without scaring real customers.
How much does the failure rate fall? It typically drops from 25-45% to 8-18%, more than halving failed trips.
Does the deposit drive customers away? Conversion falls by 5 to 12%, but it's mostly ghost orders that disappear. The net margin gain stays clearly positive.
How do I refund a deposit if a customer legitimately cancels? Mobile-money refunds are instant and free or nearly so. Set a clear policy to preserve trust.
How much can I save per month? On 300 orders with 35% failure brought to 12%, logistics savings exceed 130,000 FCFA/month in our example.
Let's talk about your project. We'll wire the mobile-money deposit and confirmation webhooks into your checkout. 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.
