Is COD Fraud and high RTO still killing your margins? Existing OTP apps aren't cutting it anymore

Shopify Discussion
1

Hey everyone,

I’ve been diving deep into the Cash on Delivery (COD) ecosystem, and it seems like fake orders and high RTO (Return to Origin) rates are still one of the biggest headaches for merchants, especially in emerging markets.

From what I’ve seen, the existing solutions on the App Store just aren’t enough. Most of them rely on basic SMS OTP verification. The problem? Malicious actors can easily bypass OTPs, and basic apps don’t catch junk addresses or repeat offenders. Plus, many of these apps have outdated, clunky dashboards and trap you with hidden per-SMS charges.

I realized merchants need an actual “Risk Engine,” not just a text message sender. So, I decided to build a proper, native-feeling solution. My app is currently in the final stages of the Shopify review process and will be live soon.

Instead of just sending an OTP, it does actual analysis:

  • Real-time Risk Scoring (0-100): It automatically evaluates every COD order based on phone/address normalization, past order history, and previous rejection counts.

  • Smart Automation Rules: You can set it to auto-hold “High Risk” orders, auto-accept “Low Risk” ones, and visually tag them directly in your Shopify admin.

  • Instant Alerts: Sends immediate email notifications to the store owner the second a high-risk order is placed.

  • Clean, Premium UI: Built natively with Polaris so it feels exactly like Shopify—no confusing 2010-era interfaces.

  • No Per-SMS Fees: Just a flat monthly plan, so your billing is predictable.

Since we are waiting for the final green light from the review team, I wanted to ask this community:

  1. How big of a pain point is COD fraud for you right now?

  2. What are the current workarounds or tools you are using to deal with it?

  3. What is the one feature you wish your current fraud protection app had?

I’d love to hear your thoughts and feedback. If anyone is interested in trying out a smarter approach to COD protection once we are live, let me know!

4

Hello there @Ababeelstudio
COD fraud and RTO remains a big headwind for many merchants, especially where COD makes up a significant portion of orders. Risk scoring and Automation can be more effective than OTP only verification, as risk scoring and automation allows to discover patterns prior to fulfill. A shared risk database that alerts merchants to repeat offenders across stores – without violating privacy rules – is one feature that merchants say they often want. Address validation, customer order history analysis, and configurable automation rules, these three methods typically provide a good defense in depth when used together instead of individually.

5

OTPs are easily bypassed, automated bot networks are the actual mechanism executing the bypass at scale. By treating COD fraud purely as a customer-validation issue rather than a bot-detection issue, we are treating the symptom. Without evaluating traffic for automation or synthetic identities before they reach the checkout page, the app remains inherently reactive.