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COD-to-Prepaid Nudge & Checkout ROI Calculator

See whether a prepaid discount or checkout tool pays for itself in lower RTO, shipping and COD costs.

Reviewed by CA Apurav GargUpdated Calculated in your browser; copied links include your figures

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Calculator

Note:
Example values — replace with yours.

Your orders

All orders shipped, prepaid and COD.

What the customer pays, before any prepaid discount.

Presets are today’s common rates. Use “Custom rate” for any other rate, including special rates and rates for earlier periods.

Landed cost of what is in one order.

Today

The rest are COD.

Share of COD orders returned to origin.

With the prepaid push

Given to every prepaid order, including buyers who already pay online.

Charged on every order shipped, or on delivered order value.

Your estimate, or the vendor’s figure for brands like yours.

Address checks and COD confirmation can lower this.

How is the checkout tool charged?
Advanced options

Paid on every order shipped.

Paid again when an order comes back.

The courier’s cash-handling charge.

Charged on each prepaid order.

Usually far lower than COD.

Can rise a little as hesitant buyers switch.

The figures below start with illustrative defaults — replace them with your own data.

Packaging and unsellable stock lost on each RTO.

Net change from a faster checkout (+) or blocking COD (−).

COD remittance cycle less the prepaid settlement days.

What borrowed or tied-up cash costs you.

For example, a WhatsApp nudge sent only to COD orders. Buyers who already pay online get no discount.

Your result

Monthly gain from the prepaid push

₹46,088

The change adds ₹46,088 a month in contribution after shipping, RTO, payment fees and the checkout tool. Blended RTO goes from 20.8% to 14.0%.

CM2 a month today
₹19,91,200
CM2 a month with the change
₹20,37,288
Blended RTO
20.8% → 14.0%
Discount to buyers who already paid online
₹97,627
Highest prepaid discount before the gain falls to zero
₹103.23
Interest saved on prepaid cash a month
₹3,476
Note:
Discount at checkout for everyone: ₹46,088 a month. Discount only for COD orders converted after checkout: ₹1,41,315 a month. The difference is mostly the discount no longer given to buyers who already pay online, less the gateway fee on their full price.
Today and with the prepaid push, a month
₹ a monthTodayWith the change
Orders delivered3,9604,300
Blended RTO20.8%14.0%
Net revenue (excl. GST)₹39,60,000₹41,37,288
Product cost−₹13,86,000−₹15,05,000
Forward shipping (delivered)−₹2,77,200−₹3,01,000
RTO shipping, packaging and damaged stock−₹1,82,000−₹1,22,500
COD fees−₹88,200−₹66,500
Payment gateway fees−₹35,400−₹55,000
Checkout tool−₹0−₹50,000
Contribution after shipping (CM2)₹19,91,200₹20,37,288

The discount to buyers who already paid online (₹97,627 a month, excl. GST) is part of the lower net revenue. Interest saved on prepaid cash (₹3,476) is not included. Rounded to the nearest rupee.

What this tells you

A prepaid discount or a checkout tool that moves buyers from cash on delivery to paying online can cut returned orders and courier charges. It also costs a discount on every prepaid order and a fee to the vendor.

Enter your orders today and the change you expect to see whether the month’s contribution after shipping goes up or down.

Assumptions used

  • Product GST rate choices: 0%, 5%, 12%, 18%, 40%, or a custom rate.
  • Revenue is earned only on delivered orders; returned (RTO) orders pay forward and reverse shipping, plus the packaging and damaged stock you enter per RTO, and bring no revenue.
  • The prepaid discount applies to every prepaid order, unless you choose to give it only to COD orders converted after checkout: then only the delivered prepaid orders above today’s get it. Otherwise returned stock is resold.
  • Payment gateway fees are charged on every prepaid order at the price the buyer pays. COD fees are charged on delivered COD orders.
  • A change in total orders applies to the orders after the change only; today’s figures are unchanged.
  • Interest saved = extra delivered prepaid orders × order value × days sooner ÷ 365 × cost of funds. It is shown separately and is not part of the monthly gain.
  • The discount ceiling is the prepaid discount at which the monthly gain falls to zero, with everything else unchanged.
  • Every default figure is an illustrative default — replace it with your own data.
  • The checkout tool fee excludes GST, with the GST on it claimed as input tax credit.
  • Figures are rounded for display only; the working uses exact values.
Legal references and sources
Product GST rate choices
Notification No. 09/2025–Central Tax (Rate) dated 17 September 2025, effective 22 September 2025, on the recommendations of the 56th GST Council meeting (nil, 5%, 18% and 40%); verified as on 2 November 2026. Use 'Custom rate' for special rates such as 3% or 0.25%, and for 12% or 28% on sales made before 22 September 2025 (28% plus cess continued on tobacco and pan masala until 31 January 2026).
Effective from 22 Sept 2025 · Last verified 27 Oct 2026 · Official source

How this is calculated

  1. Prepaid orders = orders × prepaid share; COD orders = the rest. Delivered = each × (1 − its RTO rate).
  2. Net revenue = (delivered prepaid × (order value − discount) + delivered COD × order value) ÷ (1 + GST rate).
  3. CM2 = net revenue − product cost × delivered − forward shipping × delivered − (forward + reverse shipping + packaging and damaged stock) × RTO orders − COD fee × delivered COD − gateway fee × prepaid orders × price paid − checkout tool fee.
  4. With the change, orders = orders today × (1 + change in total orders). If the discount goes only to converted COD orders, discounted orders = delivered prepaid with the change − delivered prepaid today (not below zero).
  5. Today uses no discount and no checkout tool. Monthly gain = CM2 with the change − CM2 today.
  6. Discount to buyers who already paid online = delivered prepaid orders today × discount ÷ (1 + GST rate), or nil if the discount goes only to converted COD orders.
  7. Discount ceiling = the discount at which the monthly gain is zero (the gain falls in a straight line as the discount rises).

Terms used here

Worked examples

Example 1: 5,000 orders a month at ₹1,180

18% GST, product cost ₹350, shipping ₹70 out and ₹60 back, COD fee ₹35, gateway 2%. Today 30% prepaid, RTO 4% prepaid and 28% COD. A ₹80 prepaid discount and a ₹10-an-order checkout tool are expected to lift prepaid to 50% and cut COD RTO to 24%.

  • Today: 3,960 delivered, RTO 20.8%, CM2 ₹20,38,000.00.
  • With the change: 4,300 delivered, RTO 14.0%, checkout tool ₹50,000.00, CM2 ₹20,68,788.14.
  • Monthly gain ₹30,788.14, after ₹97,627.12 of discount to buyers who already paid online.

Example 2: RTO packaging loss and a post-checkout nudge

The same business, also losing ₹45 of packaging and damaged stock on each RTO. Prepaid cash arrives 8 days sooner than COD remittance, and money costs 14% a year.

  • RTOs avoided a month: 340.
  • Monthly gain with the discount at checkout for everyone: ₹46,088.14.
  • Monthly gain with the discount only for COD orders converted after checkout: ₹1,41,315.25. No discount goes to the 1,440 buyers who already pay online, but they pay the gateway fee on the full price.
  • Interest saved on prepaid cash that arrives sooner: ₹3,475.99 a month (not part of the gain).

Our MIS & Reporting service reports contribution by payment method every month.

Questions sellers ask

Why does a prepaid discount cost more than it seems?

The discount goes to every prepaid order, including buyers who would have paid online anyway. The calculator shows that amount separately, because it is the part of the cost that brings no new prepaid orders.

Which costs fall when COD orders move to prepaid?

Fewer orders come back, so you pay less forward and reverse shipping on returned orders, and lose fewer sales. COD cash-handling fees fall too. Payment gateway fees rise, because more orders are paid online.

Where do the expected prepaid share and RTO rates come from?

They are your estimates. Use your own results from a trial, or the figures a checkout vendor gives for brands like yours, and try a cautious case as well.

Is GST on the checkout tool’s fee a cost?

Enter the fee excluding GST. If you claim the GST on it as input tax credit, it is not a cost to the business.

Why is the discount entered including GST?

Because the customer sees it on the price they pay. Your revenue falls by the discount excluding GST.

Want our team to look at these numbers alongside your books?

We keep books, file GST and TDS returns and prepare monthly MIS for D2C and marketplace sellers. Share your figures and we will walk you through what we find.

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Disclaimer

A planning estimate for general information only, based on the figures you enter. It is not professional or tax advice. The prepaid share and RTO rates after a change are estimates; actual results depend on your customers and the tool you use.

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