Pay on Delivery in Nigeria: How Sellers Can Offer It Without Losing Money
Pay on delivery can win trust and orders, but it can also cost you money. Learn when to offer it, how to reduce failed deliveries and how to track payment separately from delivery.
The short answer: pay on delivery (also called cash on delivery) lets Nigerian customers pay when their order arrives, which builds trust and can increase orders, but it exposes you to failed deliveries, wasted delivery fees and cash handling risks. Offer it where it makes sense: for physical products, in areas you can reach reliably, with order confirmation before dispatch, and with limits on high-value or custom items.
Last updated 28 October 2026.
Want to offer pay on delivery alongside online payments? On Webift you can switch cash on delivery on for physical orders and track whether each order has been paid. Create a free Webift store.
What is pay on delivery?
Pay on delivery means the customer places an order online but pays only when the item is delivered, usually by cash or bank transfer to the rider or the seller. The term is often used interchangeably with "cash on delivery" (COD), even though many Nigerian customers now pay the rider by transfer rather than cash.
It is popular in Nigeria because many shoppers are wary of paying upfront to sellers they do not know.
Benefits of offering pay on delivery
- More trust from new customers. They see the product before paying.
- More orders, especially from first-time buyers.
- Fewer "is this legit?" conversations.
- Access to customers who prefer not to pay online.
Risks and costs
| Risk | What it costs you |
|---|---|
| Customer not available | Delivery fee wasted |
| Customer refuses the item | Two-way delivery cost |
| Fake or cancelled orders | Time and stock tied up |
| Cash handling | Theft, errors, delays |
| Slow remittance | Cash flow problems |
These costs are real, and for some sellers they wipe out the extra sales. The goal is to offer pay on delivery in a way that keeps these risks small.
How to offer pay on delivery without losing money
1. Limit it to suitable orders
Pay on delivery works best for physical, ready-made products with moderate prices. Be careful with:
- Custom or made-to-order items, which cannot be resold if refused.
- Perishable food.
- High-value items going to first-time customers far away.
On Webift, cash on delivery is only available for orders that contain only physical products. Digital products are paid for upfront.
2. Limit the delivery area
Offer pay on delivery where you have reliable riders and short delivery times, for example within your city. For distant or interstate orders, ask for payment upfront.
3. Confirm every order before dispatch
Call or message the customer to confirm the order, the address, the total and when they will be available. Customers who do not respond are less likely to accept the delivery.
4. Consider a delivery fee deposit
Some sellers ask the customer to pay the delivery fee upfront and the product price on delivery. It filters out casual orders and protects you from wasted delivery costs. Explain it clearly.
5. Tell customers exactly how to pay
State whether the rider accepts cash, transfer or both. If payment is by transfer, make sure the money arrives in your account (or the rider's, if agreed) before the item is handed over, and never accept a screenshot alone. Read how to know a fake alert.
6. Track payment separately from delivery
The most common pay-on-delivery mistake is treating "delivered" as "paid". They are different. On Webift, each order has an order status (new, confirmed, processing, shipped, delivered) and a separate payment status (pending, paid, failed or refunded). After the customer pays, you mark the payment as received. That way you always know which delivered orders still have money outstanding.
7. Reconcile with riders every day
If riders collect cash or transfers for you, settle up daily. Match each delivered order with the money received. Small gaps grow quickly.
8. Encourage prepayment gently
Many customers choose pay on delivery out of habit, not distrust. You can offer secure online payment through Paystack or Flutterwave, or bank transfer at checkout, and highlight benefits such as faster dispatch. Do not hide pay on delivery if you offer it; just make prepaying easy and attractive.
Should your business offer pay on delivery?
| Situation | Recommendation |
|---|---|
| New brand, low trust | Offer it locally |
| Made-to-order products | Avoid or use deposits |
| Interstate orders | Prefer prepayment |
| Repeat customers | Offer it freely |
Test it for a month. Track how many pay-on-delivery orders are refused or fail compared with prepaid orders, and adjust.
How payment choices look at checkout
On a Webift store you choose which methods to switch on:
- Paystack and Flutterwave, with your own account or a Webift-managed gateway where available.
- Bank transfer, showing your account details at checkout.
- Cash on delivery, for physical-only orders.
The checkout shows customers only what you have enabled. Our guide to accepting online payments in Nigeria compares these options in more depth.
Frequently asked questions
Is pay on delivery the same as cash on delivery?
They are usually used to mean the same thing: the customer pays when the order arrives. In Nigeria, the payment is often a transfer to the rider or seller rather than cash.
Can I offer pay on delivery for digital products?
No. Digital products are delivered electronically, so they are paid for upfront. On Webift, cash on delivery is only offered for orders containing physical products only.
How do I reduce failed pay-on-delivery orders?
Confirm every order before dispatch, limit pay on delivery to areas with reliable riders, consider a delivery fee deposit and track refusal rates.
Who pays the delivery fee if the customer refuses the order?
It depends on your policy. Many sellers end up absorbing it, which is why deposits and confirmation calls are useful. State your policy clearly before customers order.
Offer the payment options your customers want
Pay on delivery can grow your sales when it is controlled. Create your Webift store, switch on the payment methods that fit your business and track every payment against its order. For delivery planning, read how to handle delivery for an online business in Nigeria.
