If you run an e-commerce store in Pakistan, you've likely dealt with COD (Cash on Delivery) fraud. Fake orders, rejected deliveries, and wasted shipping costs are draining profits from Pakistani merchants every day.
In this comprehensive guide, we'll cover everything you need to know to fight back.
Table of Contents
1. Understanding COD Fraud in Pakistan
COD fraud happens when customers place orders with no intention of paying. They provide fake information, reject deliveries, or simply don't answer the door.
The Scale of the Problem
- • 18-22% of COD orders are fake in Pakistan (industry average)
- • Pakistani e-commerce stores lose Rs 45M+ monthly to COD fraud
- • High-value items (electronics, fashion) are targeted the most
- • Fraudsters are getting more sophisticated with fake numbers and addresses
The problem is so widespread that some stores have stopped offering COD entirely, losing legitimate customers in the process.
2. The Real Cost of Fake Orders
Most store owners underestimate the true cost of COD fraud by 3x. Here's what a fake order actually costs:
Cost Breakdown (Rs 5,000 Order Example)
For a store processing 200 COD orders/month with an 18% fraud rate:
3. 15 Common Fraud Tactics
Here are the most common tactics fraudsters use in Pakistan:
Virtual Numbers
Using JazzCash, EasyPaisa, or disposable numbers that cannot be called back
Fake Addresses
Providing incomplete or non-existent addresses (e.g., "House 123, Street 5")
Bulk Orders
Ordering 5-10 high-value items at once from the same number
Mismatched Info
Phone area code does not match delivery city
Late Night Orders
Placing orders at 2-4 AM when stores cannot verify immediately
Multiple Attempts
Same number ordering from different names/addresses after rejections
Expensive Items Only
Targeting high-ticket items like iPhones, branded clothing
No Social Media
Phone number has no WhatsApp, Facebook, or social media presence
Suspicious Email
Generic Gmail/Yahoo accounts created recently
Rush Orders
Demanding same-day or next-day delivery (to avoid verification)
Common Fraud Locations
Certain neighborhoods known for high fraud rates
Unreachable Numbers
Numbers that are switched off or do not answer
First-Time Customers
New customers ordering expensive items
Payment Pressure
Asking about return policy before even receiving order
Vague Communication
Short, unclear responses when asked questions
4. Red Flags & Warning Signs
Look for these warning signs when processing COD orders:
Phone Red Flags
- • Number starts with virtual number prefixes (03xx-xxxxxxx)
- • Can't be reached on WhatsApp
- • No caller ID name
- • Number is switched off
- • Area code doesn't match delivery city
Address Red Flags
- • Vague address (no house number, landmarks)
- • Address doesn't exist on Google Maps
- • Known fraud hotspot area
- • P.O. Box or commercial address
- • Address used for previous rejections
Order Red Flags
- • Unusually large order from new customer
- • Multiple high-value items
- • Order placed late at night
- • Rush delivery requested
- • Similar order rejected before
Behavior Red Flags
- • Hesitant or vague when asked questions
- • Doesn't know basic product details
- • Asking about return policy upfront
- • Refusing to provide alternate contact
- • Background noise suggests call center
5. Manual Verification Strategies
If you're verifying orders manually, here's a proven process:
Phone Verification
Call the customer within 1-2 hours of order placement:
- • Confirm order details
- • Ask why they chose this product
- • Verify delivery address with landmarks
- • Check if number is on WhatsApp
Address Validation
Verify the address is real:
- • Search on Google Maps
- • Check against your fraud database
- • Ensure city matches phone area code
- • Look for complete street/house details
Risk Scoring
Give 1 point for each red flag. Then:
- • 0-1 points: Ship immediately
- • 2-3 points: Call to verify
- • 4-5 points: Request prepayment
- • 6+ points: Cancel order
Note: Manual verification works for small stores (<100 orders/month). For larger volumes, manual verification becomes impossible: you'll need automation.
6. Automated Prevention with AI
For stores processing 100+ orders/month, AI-powered fraud detection is the only scalable solution.
How AI Fraud Detection Works
Instant Analysis
AI analyzes every order in <1 second (vs 20 min manually)
Pattern Recognition
Learns from thousands of orders to spot fraud patterns
Automated Calls
AI calls customers to verify orders automatically
85-95% Fraud Reduction
Catches fraudsters before you ship
Ready to Automate?
Shippley uses AI to verify COD orders automatically. See how much you could save.
Calculate Your SavingsFinal Thoughts
COD fraud is a massive problem in Pakistan, but it's not unsolvable. Whether you're verifying orders manually or using AI automation, the key is to have a systematic process in place.
Start by implementing the red flag checklist above. As you grow, consider automating with AI to scale your fraud prevention efforts.
Download Free Resources