look news india
Ordering your favorite dish at home through online food delivery platforms has now become more expensive than ever. Major quick-delivery and food aggregators like Zomato and Swiggy have made another major change in their fee structure. If you choose ‘Cash on Delivery / COD’ instead of online payment (UPI, Debit / Credit Card or Net Banking) while ordering online, now you will have to pay additional fee (COD Fee / Convenience Charge) separately for the same. After platform fee, delivery charge, GST and packaging charge, this new charge has given a big blow to crores of consumers who considered it safe and comfortable to pay cash to the delivery boy after getting the food.
Under the new system implemented by food delivery companies, an additional amount is being added per order if cash on delivery is selected:
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COD Charge Rate: If customers select ‘Cash on Delivery’ as payment mode at the time of checkout, additional handling/convenience charge of ₹7 to ₹15 is being directly added to the bill.
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Additional impact of GST: In addition to this ₹7 to ₹15 charge, applicable 18% GST will also be payable separately, increasing the total cost of each COD order to approximately ₹8 to ₹18.
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Launch in select cities: This charge was started as a pilot project in Tier-1 and major metro cities of the country (like Delhi-NCR, Mumbai, Bengaluru, Hyderabad and Lucknow) and is now being rolled out on a large scale.
According to companies, the process of cash on delivery significantly increases their logistics and operational costs. The companies have mainly cited the following reasons behind this decision:
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Order Cancellation and Fake Orders: Data from companies shows that cancellation and rejection rates in COD orders are 4 to 5 times higher than online pre-paid orders. When the rider reaches the customer’s doorstep with the food and the customer does not pick up the phone or refuses to take the order, the prepared food is completely wasted and the company faces losses for both the restaurant and the delivery partner.
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Hassle of change and cash handling: In cash transactions, there is often a dispute between the delivery boy and the customer regarding change. Delivery partners have to handle large amounts of cash throughout the day, which increases both security risks and wastage of time.
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Promotion of digital payments: Companies want consumers to adopt 100% pre-paid payments through UPI, credit cards, wallets or net banking, so that transactions can be completely transparent, contactless and fast.
While earlier you only had to pay for the food when you ordered food, now online food bills have added a number of additional components:
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Food Item Cost: The price of the dish decided by the restaurant.
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Restaurant Packaging Charge: ₹15 to ₹35 (for containers and bags).
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Delivery Fee: From ₹25 to ₹80 depending on distance and season.
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Platform Fees: Mandatory charge of ₹6 to ₹10 on each order.
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Surge/Rain Charge: Additional ₹20 to ₹50 during rains or festivals.
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Now new COD charge: Additional fees ranging from ₹7 to ₹15 for choosing cash.
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GST: Tax on food and services ranging from 5% to 18%.
Thus, if a customer orders a meal worth ₹200, the final bill reaches ₹290 to ₹320 after various charges and taxes are added.
If you want to avoid this unnecessary expense of ₹10 to ₹15 per order, then you can adopt these simple options:
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Adopt digital payment: Make online payment directly through Google Pay, PhonePe, Paytm or UPI ID while placing the order, with no COD charges.
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Use of Platform Wallet: You can also make one-click payment by loading the advance amount in Swiggy Money or Zomato wallet.
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Credit Card and Bank Discounts: On making digital payments, instant discounts and cashback offers of 10% to 20% are also available on credit and debit cards of various banks, which reduces the bill.