Cash on Delivery (COD) is one of the most popular payment methods in Bangladesh for online shopping. It offers convenience and trust to buyers who prefer to pay only after receiving their products. However, for sellers and logistics companies, COD involves specific costs that can affect profit margins if not managed carefully. Understanding the breakdown of COD fees in Bangladesh is essential for both buyers and sellers.
In this article, we’ll explain what COD fees are, how they are calculated, and what factors influence them in the Bangladeshi e-commerce ecosystem.
What Is a COD Fee?
A COD fee is a charge applied by courier or logistics companies to process cash payments at the time of delivery. Since collecting cash involves additional handling, reconciliation, and risk, service providers add a fee to compensate for these processes.
Why COD Fees Matter in Bangladesh
In Bangladesh, COD remains dominant due to low credit card penetration and a general lack of trust in prepaid transactions. According to various e-commerce reports, nearly 80–90% of online purchases are completed through COD. This makes it critical for businesses to account for COD-related costs when pricing their products and selecting logistics partners.
Components of COD Fees in Bangladesh
COD fees can vary depending on the logistics provider and service level. Here is a typical breakdown:
1. Base Delivery Charge
This is the basic cost of delivering the parcel. It is usually determined by:
- Weight of the parcel
- Delivery distance (inside or outside Dhaka)
- Delivery speed (same-day, next-day, standard)
Example:
Inside Dhaka: BDT 50–80
Outside Dhaka: BDT 100–150
2. COD Collection Fee
This is the additional fee for handling the cash payment and remitting it back to the seller. It is often calculated as:
- A flat rate (e.g., BDT 20–40), or
- A percentage of the collected amount (e.g., 1.5%–2%)
Example:
If a customer pays BDT 1,000, and the COD fee is 2%, the fee would be BDT 20.
3. Return to Origin (RTO) Fee
If the delivery fails (e.g., customer refuses to accept), the parcel is sent back to the seller, and a return fee may apply.
Example:
RTO Fee: BDT 50–100 depending on location and weight
Popular Courier Companies and Their COD Policies
Below are some leading delivery services in Bangladesh and how they handle COD:
| Courier Service | Base Delivery (Inside Dhaka) | COD Fee | Notes |
|---|---|---|---|
| Pathao Courier | BDT 60–80 | 1.5% or BDT 20 | Fast remittance time |
| Paperfly | BDT 65–85 | 1.5%–2% | COD charge waived for high-volume sellers |
| eCourier | BDT 60–75 | Flat BDT 30 | Offers tracking and cash reconciliation tools |
| RedX | BDT 70–90 | 1.5% | 24–72 hour payment cycle |
How to Reduce COD Costs
Online sellers can take several steps to minimize COD-related expenses:
- Negotiate Rates: High-volume sellers can often get better rates or discounts on COD fees.
- Use COD Fee Calculators: Some logistics providers offer tools to estimate delivery and COD costs accurately.
- Encourage Prepaid Orders: Offer small discounts or incentives for customers who choose digital payments.
- Set Minimum Order Values: To justify the extra cost, enforce a minimum order amount for COD deliveries.
Conclusion
COD fees are an unavoidable part of the e-commerce landscape in Bangladesh, but understanding how they are structured can help businesses manage them effectively. Whether you’re a seller optimizing your logistics strategy or a buyer trying to understand delivery costs, knowing the breakdown of COD fees ensures transparency and better decision-making. Always compare courier services, look for hidden charges, and consider using a COD fee calculator to estimate your actual costs.
By staying informed, both businesses and consumers can make smarter, cost-efficient choices in the dynamic world of Bangladeshi e-commerce.