The courier bill is only part of the problem. One uncollected parcel carries outbound and return shipping, packaging, labor, trapped inventory, damage or markdown risk and lost profit. The right response is not necessarily to remove COD for everyone. It is to restrict the method for buyers with documented abusive behavior while keeping prepayment open.

Why this matters so much in Bulgaria

COD is declining as a share of payments, but it is far from disappearing. The Bulgarian E-commerce Association reports 50.30% in 2024; one year earlier, the European E-Commerce Report placed it at 60%. Disabling COD for everyone can therefore affect a very large part of genuine demand.

At the same time, COD transfers an important risk to the merchant: the order has not been paid when the product leaves the warehouse. The buyer may never visit the pickup point, may stop answering calls or may refuse delivery at the door. The store has already performed nearly all the work but receives no revenue.

There is no single public national statistic for uncollected COD parcels. Do not budget from another company’s “average.” Calculate your own rate by carrier, category, order value, region, new versus returning customer and acquisition source.

The complete cost of one uncollected parcel

Accounting often makes the two courier charges visible. The management cost is broader:

ComponentHow it arisesHow to measure it
Outbound transportThe parcel travels to an address, office or lockerCourier charge minus any amount actually paid by the buyer
Return transportThe uncollected parcel comes backThe carrier’s actual return fee
PackagingBox, mailer, filler and labelAverage packaging cost per parcel
LaborPicking, packing, label creation, calls and return intakeMinutes × fully loaded labor cost per minute
Trapped inventoryThe product cannot be sold while travelling and waitingDays unavailable and unmet demand for the SKU
Markdown or damageDamaged packaging, seasonality or hygiene restrictionsDifference between original and recoverable value
Lost profitA genuine buyer cannot purchase the last unitProbability of missed sale × gross margin

Total RTO loss = outbound shipping + return shipping + packaging + labor + markdown + lost margin

An illustrative month: a store receives 1,000 orders. If 50.30% use COD, that is 503 shipments. At the store’s own assumed 8% non-collection rate, roughly 40 come back. If round-trip shipping costs €7 and packaging plus handling costs €1.50, direct loss is about €340. If 12 trapped products could have sold at €15 gross margin, missed profit adds €180 — for roughly €520 in total. This is a scenario with stated assumptions, not a national average.

Why a blanket COD ban is often the wrong answer

Cash on delivery addresses genuine trust and habit. Remove it for everyone and you affect both abusers and reliable buyers who prefer to pay at receipt. The cost of returned parcels may simply be replaced by the cost of lower checkout conversion.

A better model is a precise restriction: COD stays available to a normal buyer but disappears where the merchant has documented risk. The buyer is not banned from purchasing; they can complete with prepayment. Risk returns to the person who has already caused a loss without punishing the entire market.

How PayVeto addresses the problem inside Shopify

PayVeto Blacklist COD operates in Shopify Checkout. A merchant adds a problematic buyer by email and/or phone, one by one or by CSV. At the next checkout, the app compares the entered contact details — including guest checkout details. On a match, the cash-on-delivery option is hidden in real time.

  1. Record a documented case. Save the email, phone and an internal note.
  2. Apply the rule before fulfillment. A native Shopify payment-customization function hides the configured COD method name.
  3. Keep a path to purchase. The buyer can use a card or another prepaid method.
  4. Measure the outcome. The dashboard shows activity and whether flagged buyers ultimately prepaid.

Shopify officially supports payment customizations that hide, rename or reorder payment methods using checkout data. That is the key technical advantage over manual cancellation after the order: the intervention happens before the risky COD shipment is created.

A blacklist needs governance

Do not flag a buyer merely for making a lawful return or because the carrier failed. Separate “uncollected/refused without valid reason” from defect claims, a wrong product, delay or transit damage.

Email addresses and phone numbers are personal data. The European Commission summarizes the GDPR principles as lawfulness and transparency, purpose limitation, data minimization, accuracy, storage limitation and security. In practice:

  • Explain the purpose and processing in the privacy notice.
  • Keep only the data and internal reason you need; avoid abusive free-text notes.
  • Set a review/deletion period instead of retaining records forever by default.
  • Provide a correction and human-review process when a buyer disputes the restriction.
  • Limit staff access and do not share the list across unrelated stores.

This is operational guidance, not legal advice. Confirm the legal basis and retention schedule for the specific store and jurisdiction.

Metrics that make COD risk manageable

KPIFormulaWhy it matters
COD non-collection rateUncollected COD shipments ÷ shipped COD ordersThe core incident frequency
RTO cost per orderTotal RTO cost ÷ returned COD shipmentsThe real loss per failed order
RTO loss as % of revenueRTO loss ÷ net revenueComparable risk over time and across categories
Flagged prepaid conversionFlagged buyers who prepaid ÷ flagged checkoutsHow many risky attempts become protected sales
Dispute/false-positive rateValid corrections ÷ restrictions appliedWhether the policy is too aggressive
Stock days at riskTotal unavailable days ÷ returned itemsCapital and time trapped in transit

Monthly net benefit = avoided RTO cost + preserved margin − tool cost − extra handling − margin from good customers lost

Be careful with “prevented shipments”: hiding COD does not prove every such parcel would have gone uncollected. The strongest conservative signal is a previously flagged buyer who prepays and successfully receives the new order.

A seven-step merchant playbook

  1. Measure the previous 90 days. Join shipment status, courier fees and return reason.
  2. Separate causes. Buyer refusal, uncollected parcel, carrier error, defect and wrong item.
  3. Create a clear rule. For example, restriction after two uncollected parcels, or one deliberate high-value refusal, subject to human review.
  4. Use safeguards before blacklisting. SMS or phone confirmation, reminders, a clear pickup deadline and deposits for expensive orders.
  5. Hide the method, not the buyer. Leave prepayment open as a purchase path.
  6. Encourage card payment. A small reward, free delivery or faster processing can shift part of the COD mix voluntarily.
  7. Review monthly. Track saved cost, prepaid conversion, complaints and incorrect flags.

Frequently asked questions

Should we disable COD for every guest?

That is a strong intervention and can reduce orders. Test it only if your own data shows materially higher guest risk, and measure the conversion you lose. More precise rules usually preserve more good customers.

Does the restriction work without a customer account?

PayVeto matches the email and phone entered at checkout, plus the phone in the shipping address, so guest checkout can be evaluated.

Does PayVeto block the buyer?

No. It hides the configured COD payment method. The buyer can still complete the order through an available prepaid method.

Can the list be shared between stores?

PayVeto’s product model keeps the list specific to the merchant’s store rather than turning it into a shared database. Decisions made by one merchant therefore do not automatically affect another.

Sources and methodology

No unverified “average non-collection rate for Bulgaria” is presented. The 8% in the scenario is an explicit assumption and must be replaced with the merchant’s own data.