Note: This article covers cash on delivery as offered through Japanese carriers, a payment method specific to the Japanese market. The information below will not be relevant if you are not selling in the Japanese market.
When running a Shopify store, offering a payment method that's convenient for buyers directly translates into higher sales and greater customer satisfaction. Among these, cash on delivery is an appealing option for customers who don't use credit cards or who prefer to pay when receiving their product.
This article explains in detail the benefits and drawbacks of cash on delivery, how to add it, the setup steps in Shopify, and recommended Shopify apps for stores offering cash on delivery.
What Is Cash on Delivery?
Cash on delivery is short for "payment on delivery," a payment method where the customer pays the delivery driver at the time the product is delivered. It has the benefit of letting customers without a credit card purchase products, but it also comes with the drawback of an added cash-on-delivery fee.
Benefits of Cash on Delivery
Customers can buy with peace of mind
Because payment happens after the product is received, customers can avoid the risk of fraud or non-delivery.
Helps reduce cart abandonment
Source: Baymard Institute
Among the top reasons for cart abandonment are "didn't want to enter credit card information" and "the payment method I want isn't available." Cash on delivery can be considered somewhat effective at preventing cart abandonment among customers who don't own — or prefer not to use — a credit card.
Source: Internet usage trends | Ministry of Internal Affairs and Communications
According to a fiscal year 2021 survey by the Ministry of Internal Affairs and Communications, cash on delivery ranks third among "payment methods used when purchasing online," behind credit card payment and convenience store payment. If you're looking to add more payment options, cash on delivery is worth considering.
For convenience store payment, the second most-used method, please also see the blog article below.
The blog article below introduces cart abandonment countermeasures on Shopify beyond simply "expanding payment methods." Please use it as a reference.
Reach younger customers who can't get a credit card
Credit card payment is one of the main payment methods for e-commerce sites, but most credit card companies set the minimum age for issuing a card at 18 to 20 years old. As a result, stores that only accept credit card payments generally cannot sell to minors — adding cash on delivery solves this problem.
Reach customers who prefer not to use a credit card
There are also many adults who feel hesitant about using credit card payments. Adding cash on delivery so that customers who want to avoid credit card payments can still make a purchase benefits both the buyer and the seller.
No transaction fee
When using a payment method other than Shopify Payments, a transaction fee applies based on your Shopify plan. Cash on delivery, however, does not incur a transaction fee.
For more on Shopify Payments, please also see the blog article below.
Drawbacks of Cash on Delivery
A cash-on-delivery fee applies
Cash on delivery incurs a cash-on-delivery fee, which adds to the buyer's cost.
Risk of the customer being unavailable or refusing delivery
If the customer isn't home at delivery time, a re-delivery has to be arranged, which can delay receipt of the product. Also, if the buyer never accepts the product, it's treated as a return, and the shipping cost can become a loss for the seller.
Not well suited to high-priced items
Cash on delivery has an upper limit. For high-priced items, the order amount may exceed that limit. The limit varies by carrier, but it's often around ¥300,000.
Cash-on-Delivery Fees by Carrier
Yamato Transport (TA-Q-BIN Collect)
| Cash-on-Delivery Amount | Fee (tax included) |
|---|---|
| ¥1 – ¥9,999 | ¥330 |
| ¥10,000 – ¥29,999 | ¥440 |
| ¥30,000 – ¥99,999 | ¥660 |
| ¥100,000 – ¥300,000 | ¥1,100 |
Yamato Transport's (TA-Q-BIN Collect) fees by cash-on-delivery amount can be checked on Yamato Transport's official website.
Please tell me the fee for cash on delivery (TA-Q-BIN Collect) | Yamato Transport official site
Sagawa Express (e-Collect)
| Cash-on-Delivery Amount | Fee (tax included) |
|---|---|
| Up to ¥10,000 | ¥330 |
| Up to ¥30,000 | ¥440 |
| Up to ¥100,000 | ¥660 |
| Up to ¥300,000 | ¥1,100 |
| Up to ¥500,000 | ¥2,200 |
| Up to ¥600,000 | ¥6,600 |
| Over ¥600,000, per additional ¥100,000 | ¥1,100 |
Sagawa Express's (e-Collect) cash-on-delivery fees can be checked on the pricing page of its official website.
e-Collect® | Sagawa Express official site
Japan Post (Cash on Delivery)
| Cash-on-Delivery Amount | Fee (tax included) |
|---|---|
| Up to ¥30,000 | ¥330 |
| Up to ¥100,000 | ¥550 |
| Up to ¥200,000 | ¥880 |
| Up to ¥300,000 | ¥990 |
| Up to ¥500,000 (requires the security service) | ¥1,430 |
Japan Post's (Cash on Delivery) fees can be checked on the pricing page of its official website.
Cash-on-Delivery Consolidated Remittance Service | Japan Post official site
Seino Transportation (Cash on Delivery Service)
| Cash-on-Delivery Amount | Fee (tax included) |
|---|---|
| Up to ¥30,000 | ¥440 |
| Up to ¥100,000 | ¥660 |
| Up to ¥200,000 | ¥1,100 |
| Up to ¥300,000 | ¥2,200 |
| Up to ¥400,000 | ¥3,300 |
| Up to ¥500,000 | ¥4,400 |
| Up to ¥1,000,000 | ¥9,900 |
※ Home delivery is limited to amounts up to ¥300,000.
Seino Transportation's (Cash on Delivery Service) fees can be checked on the Cash on Delivery Service page of its official website.
Kangaroo Cash on Delivery Service | Seino Transportation official site
Fukuyama Transporting (Cash-on-Delivery Service)
| Cash-on-Delivery Amount | Fee (tax included) |
|---|---|
| Under ¥20,000 | ¥300 |
| ¥20,000 – under ¥30,000 | ¥400 |
| ¥30,000 – under ¥100,000 | ¥600 |
| ¥100,000 – under ¥300,000 | ¥1,000 |
| ¥300,000 – under ¥500,000 | ¥2,000 |
Fukuyama Transporting's (Cash-on-Delivery Service) fees can be checked on the Cash-on-Delivery Service page of its official website.
Fukutsu Cash-on-Delivery Service | Fukuyama Transporting official site
How to Set Up Cash on Delivery in Shopify
Cash on delivery can be set up from the Shopify admin.
(1) Click "Settings" in the Shopify admin
(2) Click "Payments" on the settings screen
(3) Click "Manual payment methods" within the Manual payment methods section
(4) Select "Cash on Delivery (COD)" from the displayed list of payment methods
(5) In the Cash on Delivery (COD) setup popup, note that a cash-on-delivery fee applies and describe the payment steps
(6) Click "Activate Cash on Delivery (COD)"
Points to Watch Out for When Using Cash on Delivery in Shopify
The cash-on-delivery fee isn't calculated automatically
Shopify has no built-in feature to automatically calculate the cash-on-delivery fee based on the order amount. If you want to automatically calculate the cash-on-delivery fee, you'll need to use the Shopify app "MR.DAIBIKI."
Recommended Shopify Apps for Handling Cash on Delivery
MR.DAIBIKI — For automatically calculating the cash-on-delivery fee
MR.DAIBIKI is an app that automatically calculates the cash-on-delivery fee and notifies the customer.
For customers who choose cash on delivery at checkout in your e-commerce store, it automatically calculates the cash-on-delivery fee, notifies the customer of the total payment amount, and automatically updates the order amount to include the fee.
The blog article below explains in detail MR.DAIBIKI's features, pricing plans, and recommended functionality. Please use it as a reference.
RuffRuff Order Limits — For controlling when cash on delivery is shown or hidden
RuffRuff Order Limits is fully localized for Japanese and is Japan's first Shopify app built on the Cart and Checkout Validation API.
By using the Cart and Checkout Validation API, it handles order-restriction logic on the server side — processing that previously could only be done on the front end. As a result, it achieves more robust order restrictions that are harder to bypass compared to existing order-limit apps.
With a single app, you can apply quantity limits, amount limits, bundling restrictions, customer restrictions, and payment method hiding.
Using this app, you can achieve things such as:
・Hide cash on delivery when the cart total reaches ¥3,000 or more
・Hide cash on delivery when the cart contains pre-order products
・Hide cash on delivery for guest customers only
The blog article below explains how to use RuffRuff Order Limits to automatically hide cash on delivery. Please use it as a reference.
Summary
Cash on delivery is a convenient payment method for buyers, but it also comes with drawbacks such as fees and the risk of refused delivery. When adding cash on delivery to Shopify, it's important to check each carrier's fees and configure it appropriately. We also recommend using a Shopify app to automatically calculate the cash-on-delivery fee. Understanding the benefits and drawbacks of cash on delivery and choosing payment methods that fit your products and customer base is key to running a successful Shopify store.
Finally, the blog article below rounds up the payment methods available on Shopify. Please use it as a reference.
