COD risk scoring is software that predicts, before a parcel ships, whether a cash-on-delivery order will be refused at the door. COD stands for cash on delivery: the shopper pays the delivery rider, in cash or by UPI, when the parcel arrives. Many Indian shoppers choose it because they do not yet trust a new website with their money.
The seller pays for every refusal. If the shopper is not at home, changes her mind or never meant to buy, she refuses the parcel. The courier then carries it all the way back to the seller's warehouse. This is called RTO, return to origin, and the page on cash on delivery and RTO explains it in full. The seller pays the courier for both trips, and the product may come back damaged.
The score is worked out inside the one-click checkout, in the second before the shopper confirms her order. A model looks at signals such as these: how often this phone number has refused COD parcels before, on any store that uses the same checkout; the share of COD parcels refused in the delivery pincode; whether the address is complete, with a house number and a landmark; the value of the cart; and whether the same person has placed several COD orders within a few minutes. It turns these signals into one score from 0 to 100.
Consider a home-décor brand in Jodhpur that sells a ₹1,499 set of cushion covers. A courier charges it ₹80 to deliver a parcel, and another ₹80 if the parcel comes back. A shopper chooses COD for an address in a town where 30% of COD parcels are refused. Her phone number has refused two COD parcels on other stores in the last six months. The model gives the order a score of 82.
The brand, not the model, decides what each score leads to. This brand has set three bands. Below 40, cash on delivery is offered as normal. From 40 to 70, the shopper must pay a ₹99 advance by UPI and the rest in cash at the door. Above 70, COD is not shown, and the checkout offers ₹75 off for paying the full amount now. So this shopper sees the ₹75 offer, and pays ₹1,424 by UPI. The brand ships knowing the parcel cannot come back as an RTO. A refused parcel would have cost it ₹160 in courier charges, plus the packing.
The aim is not to turn shoppers away, because most COD orders are genuine. The aim is to catch the few orders that are likely to come back. It is a kind of risk score, like the score that payment fraud detection gives a card payment.
COD risk scoring is different from delivery failure prediction. That software runs after the order is accepted. It chooses the courier most likely to deliver the parcel, and books a time when the shopper will be at home. Both use similar signals, but COD risk scoring acts before the order is accepted, and delivery failure prediction acts before the parcel leaves.