Xiaomi removes Cash on Delivery option for Redmi Note 5 Pro: Here’s why

Xiaomi has removed Cash on Delivery (CoD) option for its Redmi Note 5 Pro smartphone. The company said the decision was taken to curb reselling of its smartphones . Customers will be unable to place the CoD orders for the smartphone on mi.com and Flipkart (only for initial sales).

"As per IDC, our sales have rocketed from approximately 1 million units per quarter in 2015 end to approximately 9 million per quarter in 2017 end, which translates to 9X growth within two years. We understand that many of you have not been able to buy Redmi Note 5, Redmi Note 5 Pro and Mi TV 4, despite us bringing very large quantities (more than 3 Lakh units in the 1st sale itself)," said the company in a post on its forum.

"In order to restrict reselling, we have decided to remove COD payment option for the upcoming sales of Redmi Note 5 Pro on mi.com and Flipkart (Only for initial few sales). This would give a better chance to our Mi fans to purchase our products. We have always, and will continue to stringently discourage unauthorized reselling across all our channels," it added.

What's the issue?

Xiaomi is highly popular in the budget smartphone segment. For instance, its Redmi Note 4 has been one of the highest selling smartphones in 2017. The problem, however, is that a lot of customers are unable to purchase the phone due to the high demand.

Some third-party sellers or individuals place a CoD order only to resell the phone via unofficial channels (non-Xiaomi partner platforms). One of the common trends is that these individuals place the CoD order but reject the delivery if they fail to find a buyer.

Xiaomi confirmed this trend in December last year.

"We have come across some users who have been increasingly rejecting orders upon delivery. This increases the operational cost which makes it really difficult for us to keep our products affordable for all Mi fans. In order to protect the interest of our Mi fans, we have started identifying such suspicious Mi IDs and have put a check on their orders," said the company in a forum post.

Flash sales

Last week, Xiaomi Redmi Note 5 Pro was sold out in less than three minutes during the first flash sale, the company claimed. Xiaomi said it had put up 3 lakh units of the phone on sale.

The flash sales have always been looked upon with suspicion as the smartphone companies usually do not disclose how many units go up on sale, while "sold out in seconds" are advertised to suggest a high demand. This is probably the first time when Xiaomi has disclosed the number of units that went up on sale.

Cash on Delivery conundrum

It's not the first time a company has resorted to block Cash on Delivery orders to prevent fraud and reduce operational costs. E-commerce giant Flipkart has a limit of ₹50,000 on CoD orders. Also, not all the items and cities are eligible for CoD.

"All items that have the "Cash on Delivery Available" icon are valid for order by Cash on Delivery. Add the item(s) to your cart and proceed to checkout. When prompted to choose a payment option, select "Pay By Cash on Delivery". Enter the CAPTCHA text as shown, for validation," says Flipkart on its website.

"Once verified and confirmed, your order will be processed for shipment in the time specified, from the date of confirmation. You will be required to make a cash-only payment to our courier partner at the time of delivery of your order to complete the payment."