The Effect of Cash on Delivery (COD) System on Return Rates: A Case Study on SPX Shopee Agents in Binjai

Abstract

The Cash on Delivery (COD) payment system serves as a primary pillar in Indonesia’s e-commerce ecosystem, designed to bridge the trust gap between sellers and buyers. However, this flexibility often correlates with elevated goods return rates that significantly burden downstream logistical operations. This study aims to analyze the influence of the COD system on the rate of goods returns, employing a specific case study at SPX Express agents in Binjai City, North Sumatra. Using a descriptive quantitative approach, primary data were collected through observation, in-depth interviews, and questionnaires administered to 100 Shopee users in Binjai who had actively utilized the COD feature. Secondary data were gathered from internal agent reports regarding failed delivery statuses. Simple linear regression analysis revealed that the COD system exerts a positive and significant influence on goods return rates. The dominant triggering factors include irresponsible consumer behavior—such as unilateral cancellations and unprepared cash funds—inaccurate addresses, and courier communication constraints, collectively accounting for 80% of return incidents. The findings indicate that while COD effectively drives transaction volume among digitally underserved populations, its logistical sustainability depends heavily on strengthened platform validation algorithms, stricter sanctions for feature abuse, and targeted consumer digital literacy programs. This study contributes to logistics management literature by addressing the underexplored operational impacts of COD at the sub-urban agent level and offers practical recommendations for platform managers, logistics agents, and policymakers to optimize COD implementation without compromising operational efficiency.