Without Rs500 and Rs1000, Cash on Delivery being limited
As PM Modi played his Trump card last night and banned Rs 500 and Rs 1000 denomination of notes from midnight, now e-commerce companies Trumped customers by changing their Cash-on-delivery method.
The e-commerce market leaders Amazon and Flipkart have altered acceptance of cash for payments. Amazon’s website doesn’t offer the option to pay by cash anymore, and rather displays the message like “We have disabled COD for you to save cash for essential payments.”
However, Flipkart shows a message stating that cash on delivery is not available- but it was noticed that this was only for items priced above Rs. 2,000. Snapdeal does the same, but also reminds the customers “Current currency notes of Rs 500 & Rs 1,000 have been discontinued. Please keep the right denominations handy for payment at delivery.”
Amongst others, Zomato and Swiggy allow only electronic payment method so as to “avoid confusion” following the ban. Paytm also has inconsistent behaviour, as items prices above Rs 2000 were available for COD and others below it weren’t available on COD. Uber has allowed cash payments but also notifies its customers that drivers won’t be accepting 500 or 1000 rupee denominations.
However, Grofers seems to be accepting cash, without any warnings, accompanied by Ola.
The reports have said that e-commerce players showed significant reductions in cash-on-delivery orders during the recent festive season, majority of sales on these platforms continue to be made by cash. The festive sales usually come from tier-2 and tier-3 towns, which have low digital payment penetration. And the ban on cash payments is expected to affect sales from smaller towns in the short term.
Reportedly, in the long term, digital payments could replace cash, but e-commerce companies say they could face a short term dip in sales and also large number of returns from customers who’ve already placed orders with them.
It has been said that Cash-on-delivery might have been one of the reasons for India’s e-commerce boom, but was also one of the biggest drains on the margins of these companies..