The Challenge
This mid-sized furniture brand had built a loyal customer base across India, offering everything from sofas to dining sets through their D2C website. With an average order value of ₹18,000, they seemed well-positioned for profitability. However, their finance team noticed a troubling pattern: despite growing revenue, their net margins were declining quarter over quarter.
The brand offered Cash on Delivery (COD) across all serviceable pincodes without any restrictions. Their leadership believed that offering COD everywhere was essential for customer acquisition, especially in Tier 2 and Tier 3 cities where digital payment adoption was still growing. What they did not realize was that this blanket policy was costing them crores.
The Hidden Problem
COD orders in certain regions had return rates exceeding 35%, compared to the company average of 8%. The cost of shipping large furniture items both ways was devastating their unit economics.
The Discovery
When TrueLens conducted a comprehensive operations audit, the pincode-level data revealed a striking pattern. Just 15% of their serviceable pincodes were responsible for 60% of all returns and cancellations. These were not random distributions - they clustered around specific regions with predictable characteristics.
Our analysis uncovered several critical insights:
- High-risk pincodes: 847 pincodes showed COD return rates above 25%, with some exceeding 45%
- Repeat offenders: Certain customer addresses had placed and returned orders 4-5 times within a year
- Seasonal patterns: Festival season COD abuse spiked in specific regions, suggesting coordinated behavior
- Delivery cost asymmetry: Round-trip shipping for returned furniture items cost ₹2,400-3,800 per order
The Solution
TrueLens worked with the brand to implement a sophisticated pincode intelligence system. Rather than eliminating COD entirely (which would hurt legitimate customers), we created a tiered approach based on risk scoring.
Three-Tier Pincode Classification
Every pincode was assigned a risk score based on historical return rates, customer behavior patterns, and regional characteristics:
- Green Zone (Low Risk): Full COD availability with standard terms - 4,200 pincodes
- Yellow Zone (Medium Risk): COD available with ₹500 non-refundable booking fee - 1,800 pincodes
- Red Zone (High Risk): Prepaid only with attractive discounts for digital payments - 847 pincodes
Dynamic Scoring Updates
The system was designed to learn and adapt. Pincodes could move between zones based on recent order behavior, ensuring that improving regions were not permanently penalized while maintaining protection against new problem areas.
The Results
Within three months of implementing the pincode intelligence system, the impact was transformative:
Importantly, the brand did not see a significant drop in overall orders from restricted regions. Genuine customers were willing to pay the booking fee or switch to prepaid options when offered additional discounts. The fraudulent and impulse orders simply disappeared.
"We were afraid of losing customers by restricting COD. Instead, we lost the customers who were never going to keep their orders anyway. Our genuine customer base has actually grown because we can now invest in better service."
Long-term Impact
Beyond the immediate savings, the pincode intelligence system has become a strategic asset for the brand. They now use the same data infrastructure to optimize delivery partner selection, predict demand by region, and make informed decisions about warehouse placement for their expansion plans.
Is COD Costing You More Than You Think?
Most brands lose 3-8% of revenue to preventable COD abuse. Let us show you where your hidden losses are.
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