Shopify Plus Strategies for Cash-on-Delivery Heavy Markets Like Saudi Arabia

Saudi Arabia’s eCommerce market is becoming increasingly digital, but cash on delivery remains an important consideration for online retailers. 

For merchants selling into the Kingdom, the challenge is not simply whether to offer COD. It is how to support it without increasing failed deliveries, cancellations, operational costs, and payment-related friction.

For Shopify Plus merchants, investing in Shopify Development Services can help create a more flexible payment strategy that combines COD, digital payment methods, checkout personalization, order verification, and risk controls.

The goal is not necessarily to move away from COD. Instead, retailers can create a COD-plus payment experience that accommodates customer preferences while supporting more efficient and scalable commerce operations.

Why Cash on Delivery Still Matters in Saudi Arabia

Saudi shoppers are increasingly embracing digital payment methods, but cash on delivery remains relevant for certain customer segments.

For Shopify Plus merchants, the strategy should balance customer choice with operational control. 

Removing COD entirely could create friction for customers who prefer to pay at delivery, while offering it without any restrictions can increase exposure to cancellations, failed deliveries, and additional fulfilment costs.

These can include:

• Unconfirmed orders
• Customer cancellations
• Failed deliveries
• Return-to-origin costs
• Cash collection
• Payment reconciliation
• Higher fulfilment costs
• Fraudulent or accidental orders

The better approach is to make COD available where it makes commercial sense, while giving customers convenient digital alternatives.

The Shift From COD to a COD-Plus Payment Strategy

Saudi Arabia’s payment ecosystem is changing quickly. The Saudi Central Bank reported that electronic payments accounted for 85% of total retail payments in 2025, compared with 79% in 2024.

For Shopify Plus merchants, this shift makes a broader payment strategy increasingly important. Rather than choosing between COD and digital payments, retailers can combine both to accommodate customer preferences while reducing their dependence on cash-based transactions.

A balanced payment strategy can include:

The objective is to meet customers where they are while making digital payment adoption easier over time.

1. Make COD Available Without Making It the Default for Every Order

Not every order carries the same level of risk.

A low-value order from a returning customer may present very little concern, while a high-value order from a new customer could create considerably more exposure.

Understanding the operational limits Saudi brands face before upgrading to Shopify Plus is essential when evaluating how payment customization can support business needs.

Shopify Plus allows merchants to customize payment experiences using Shopify Functions, helping them adjust how payment methods are presented based on checkout information and business logic.

This gives merchants an opportunity to create rules around COD availability.

For example, a retailer could consider:

• Offering COD below a defined order value
• Restricting COD for high-value purchases
• Limiting COD for selected products
• Restricting COD for specific delivery locations
• Using customer history when determining payment availability
• Encouraging digital payment for higher-risk orders

The exact rules should reflect the retailer’s margins, fulfilment costs, customer behaviour, and risk profile.

2. Combine COD With Local Digital Payment Options

COD should not operate in isolation.

As digital payment adoption grows across Saudi Arabia, retailers have an opportunity to make digital payment methods a natural part of the checkout experience.

The growth of local payment methods also highlights the changing payment landscape. A Juniper Research report projected that local payment methods could account for more than 52% of Saudi Arabia’s eCommerce transaction value by 2028, compared with 31% in 2023.

For Shopify Plus merchants, this reinforces the importance of offering a payment mix that reflects local customer behaviour rather than relying on a single payment method.

Depending on the business and available integrations, the checkout could support:

• COD
• Debit and credit cards
• Digital wallets
• Local payment methods
• BNPL
• Other relevant payment options

The right combination will depend on the retailer’s products, customer segments, average order value, and commercial model.

3. Reduce COD Risk With Order Verification

COD creates a unique challenge because the customer does not make payment at the time of purchase.

The retailer therefore takes on greater risk before the order reaches fulfilment.

Order verification can help reduce this exposure.

Retailers can consider using:

• SMS confirmation
• OTP verification
• Customer phone verification
• Address validation
• Order confirmation messages
• Manual verification for high-value orders
• Automated risk checks
• Confirmation before fulfilment

For example, if a customer places a high-value COD order, the business could request confirmation before the warehouse begins processing it.

This additional step can help reduce accidental orders, suspicious transactions, and unnecessary delivery attempts.

4. Use Order Value Rules to Control COD

Order value is another useful factor when deciding whether COD should be available.

A business could establish different payment rules based on the value of the basket.

These are examples rather than universal thresholds. Each retailer should determine its own rules based on average order value, delivery costs, cancellation rates, margins, and customer behaviour.

Shopify’s Payment Customization Function API supports logic that can conditionally modify payment options based on checkout details and business rules. Shopify’s documentation provides an example of hiding COD when the cart exceeds a specified value.

This makes payment customization particularly relevant for merchants with different risk levels across their orders.

5. Optimize Checkout Around Trust

Payment preference is often connected to customer confidence.

A shopper choosing COD may want reassurance before making a purchase rather than necessarily rejecting digital payments.

The checkout should therefore make important information easy to understand.

Consider including:

• Clear payment descriptions
• Transparent delivery information
• Expected delivery dates
• Return and refund information
• Customer support details
• Clear COD terms
• Secure payment messaging
• Any additional delivery charges

Shopify Plus also supports checkout UI extensions that allow merchants to customize the checkout experience across information, shipping, and payment steps.

The objective should be to make every payment option feel clear, predictable, and trustworthy.

6. Personalize Payment Options Where Appropriate

Different customers may have different payment preferences and risk profiles.

A returning customer with a history of successful orders could receive a different experience from a first-time customer placing a high-value order.

For example:

New Customer

COD alongside digital payment options, with additional order verification where required.

Returning Customer

COD and digital payments with a faster checkout experience.

High-Value Customer

Digital payment options, BNPL where applicable, or other approved payment methods.

This approach allows retailers to balance customer convenience with business protection rather than applying the same payment rules to every shopper.

7. Connect COD With Fulfilment and Logistics

COD is not simply a checkout decision. It affects the entire order lifecycle.

A COD order can influence:

• Order confirmation
• Warehouse processing
• Courier allocation
• Delivery attempts
• Cash collection
• Reconciliation
• Returns
• Customer service

This makes system integration important for retailers operating COD at scale.

Connecting these systems can help retailers maintain better visibility across the complete COD lifecycle.

8. Measure COD Performance Separately

Retailers should not evaluate COD simply by looking at how many customers choose it.

The more important question is whether COD orders are profitable and successfully fulfilled.

Useful KPIs include:

• COD conversion rate
• COD cancellation rate
• Delivery success rate
• Return-to-origin rate
• COD refusal rate
• Average order value
• Cost per COD order
• Digital payment conversion
• Payment method mix
• Customer lifetime value

For example, if COD produces a strong conversion rate but also generates a high return-to-origin rate, the retailer should evaluate the complete economics of the payment method rather than focusing on conversion alone.

9. Use Shopify Plus to Build a Flexible Payment Strategy

Shopify Plus gives enterprise merchants additional flexibility to customize their checkout and payment experience.

For Saudi retailers, this can be particularly valuable when payment rules need to account for:

• Customer segments
• Order value
• Product category
• Delivery location
• Customer history
• Fraud risk
• Promotional campaigns
• B2B or B2C requirements

Shopify’s payment customization capabilities can allow merchants to customize how payment methods are presented based on checkout details and business logic.

The key consideration is not simply whether a payment method can be added. It is whether the payment, checkout, fulfilment, and customer experience work together effectively.

COD vs Digital Payments in Saudi Arabia

Saudi Arabia should not be viewed as a market that is simply moving from COD to digital payments overnight.

Instead, retailers need to support a market where both behaviours can coexist.

The focus should therefore be on creating a flexible payment environment that supports customer choice while helping retailers manage operational and financial risk.

What Should Saudi Shopify Plus Merchants Prioritize?

A strong payment strategy should balance three priorities.

Customer Convenience

Offer payment methods that customers understand and trust, while keeping the checkout simple.

Business Protection

Use verification, order-value rules, payment customization, and risk controls to reduce unnecessary COD exposure.

Digital Payment Growth

Make digital payment methods visible, convenient, and easy to use as customer preferences continue to evolve.

Together, these priorities create a more flexible payment experience that can support both current customer behaviour and the continued growth of digital commerce in Saudi Arabia.

How to Build a COD-Optimized Shopify Plus Store

When Should Saudi Retailers Rethink Their COD Strategy?

COD may need to be reassessed when:

• Cancellation rates are increasing
• Return-to-origin costs are affecting margins
• Customers are increasingly choosing digital payment methods
• High-value orders create excessive fulfilment risk
• Cash reconciliation is becoming difficult
• Payment options are limited at checkout
• The business is expanding into new customer segments
• Existing payment integrations cannot support the desired checkout experience

These signals do not necessarily mean removing COD.

They may indicate that the business needs a more sophisticated and flexible payment strategy.

Build a Smarter Shopify Plus Payment Experience for Saudi Arabia

Saudi Arabia’s payment landscape is evolving quickly. COD remains relevant, but digital payments are becoming an increasingly important part of the customer journey.

For Shopify Plus merchants, the opportunity is to build a COD-plus strategy that combines customer choice with stronger business controls.

That means offering COD where it makes sense, encouraging digital payments where appropriate, verifying higher-risk orders, connecting payment with fulfilment, and using data to continuously optimize the checkout experience.

Ready to optimize your Shopify Plus store for Saudi Arabia’s evolving payment landscape? 

Connect with our Shopify Plus experts to build a localized payment, checkout, and COD strategy designed around your customers and business goals.