Cash on delivery: a defining feature of the Algerian market
In Algeria, over 80% of online purchases are paid for cash on delivery. This method dominates for several reasons: low banking penetration, distrust of online payments, and a deeply rooted habit of paying in person. To succeed in e-commerce in Algeria, offering this payment method by default is essential.
Unlike European markets where card payment is the norm, Algerian e-commerce was built around cash on delivery. The major local marketplaces understood this early: it's non-negotiable if you want to turn a visitor into a customer.
The advantages of cash on delivery
For the customer, cash on delivery removes the risk of being scammed: they only pay once they receive the product they ordered. This trust is essential in a market that's still emerging. As a result, conversion rates are significantly higher than with mandatory online payment.
For the merchant, it's also an advantage: you pay no transaction fees (unlike Stripe, which charges around 2.9% + €0.30 per card payment). Cash is free — the only cost is the carrier's collection fee, which varies by wilaya.
- Maximum trust for the customer: they pay only on receipt
- No transaction fees for the merchant (unlike card payment)
- Higher conversion rate (up to 3× higher than card-only payment)
- Accessible to every customer, even the unbanked
The drawbacks and how to minimize them
Cash on delivery has a downside: returns. A customer can refuse the package at delivery, which costs you the round-trip shipping fee. To limit this risk, confirm every order by phone before shipping. A 30-second call is enough to cut the refusal rate by 3.
Another drawback is cash-flow management: the money only arrives after delivery, with a 7- to 15-day delay depending on the carrier. Plan for this delay in your cash flow, especially if you buy stock upfront.
Optimizing your cash-on-delivery workflow
To industrialize this payment method, set up a rigorous process: systematic phone or WhatsApp confirmation within 2 hours of the order, clear package labeling with the amount to collect, daily tracking of packages in transit, and follow-up with unreachable customers after 3 attempts.
Also use automatic SMS to let the customer know their package is on its way. A customer who's been notified is a customer who's expecting delivery — and who won't refuse the package. Most carriers offer an API to automate these notifications.
When to offer card payment as a complement?
Card payment isn't incompatible with cash on delivery — it's complementary. Activate it for premium orders, high-value carts, or digital products (books, courses) that don't require physical delivery. On shopsdz, card payment is available on the Pro and Business plans.
Ideally, offer both: cash on delivery to reassure the largest number of customers, and card payment for those in a hurry or with a larger cart. This way you cover every preference in your audience.