CoDs are the Single Biggest Contributor to Return to Origin in E-commerce: Report

Unicommerce’s logistics platform ShipWay has unveiled its e-commerce logistics report 'ShipNotes', wherein it revealed that nearly 26% of the CoD (cash on delivery) orders are returned while less than 2% orders are returned in prepaid transcations.  

This revelation reinforced the fact that RTO (Return to Origin) challenges are overwhelmingly concentrated in non-prepaid transactions or the CoD orders.

Looking at the percentage of returns across various cities, the report shows that Vadodara recorded the lowest RTOs at 18%, while Patna recorded the highest RTO percentage at 35%.

Shipway analysis reports Vadodara, Thrissur, Mumbai, Kolkata, Chandigarh, Ahmedabad, Ernakulam, Nagpur, Chennai and New Delhi as the top 10 cities with least RTO rates.

On the other hand, Patna, Srinagar, Jaipur, Varanasi, Ranchi, Jammu, Meerut, Guwahati, Vishakhapatnam and Nasik rank as cities with highest RTO rates.

The report claims that the difference in RTO rates across cities points to the complex interplay of factors such as address accuracy, consumer behavior, and logistical predictability across diverse delivery environments.

This analysis includes cities for which Shipway processed a minimum of 5,000 non-prepaid orders in FY25.

Further, delivery speed emerged as a strong influencing factor. In FY 25, orders attempted within 1–2 days recorded a 22% RTO rate, which rose to 27% when attempted in 3–5 days, and further to 35% when delivery was attempted after more than 5 days. These insights clearly show that slower deliveries contribute to higher RTOs.

The report also highlights an interesting relationship between order value and RTO rates. Orders priced between INR 500 and INR 1,000 saw the highest RTO rate at 28%, while lower-value orders under INR 500 and orders over INR 1,000 experienced lower RTOs of 25% and 24% respectively.

These findings suggest that mid-value purchases may be more susceptible to impulse buying and post-purchase regret.

Distance and zone classification also had a measurable effect on RTO outcomes. Intra-city shipments (Zone 1) recorded a 20% RTO rate, followed by metro-to-metro (Zone 3) at 22%.

Intra-state deliveries (Zone 2) recorded 23% RTOs. Inter-state, non-metro shipments (Zone 4) reported RTOs of 27%. Special zones (Zone 5) including North East, Jammu & Kashmir reported RTOs of 28%.

These trends align with the inherent complexity of longer-distance logistics and localized challenges in certain regions, it said.

To mitigate these factors, Shipway said it has a suite of targeted features aimed at reducing RTOs across its network. These include Automated CoD order and address confirmation to verify customer intent before dispatch besides offering other services.

“RTOs have long been an Achilles’ heel for D2C brands. Our data-driven approach for RTO reduction has created a blueprint for the industry. Anchored in intelligent automation and customer-centric verification systems, it has not only reduced operational costs for our partners but also enhanced the delivery experience for millions of customers across the country,” said Saurabh Choudhary, Chief Business Officer, Shipway.

Shipway said with its technology stack, including AI-driven risk scoring and enhanced customer communication tools, the company in collaboration with the brands enable them in reducing RTOs further.