How to Add COD, VAT, and Local Delivery to Your eCommerce Store

Running an online store means offering payment options that customers trust. Cash on delivery (COD) allows customers to pay after receiving their orders. The tax you collect on sales is VAT (Value Added Tax). Local delivery refers to the method of delivering goods at a local level.

These three features can boost your sales and make customers happy. COD builds trust because customers don’t pay upfront. VAT keeps you legal with tax rules. Local delivery saves money and gets products to customers faster.

This guide shows you how to add these features to your store.

You’ll learn step-by-step instructions for different platforms. We’ll cover common mistakes and how to avoid them. By the end, you’ll know exactly how to set up COD, VAT, and local delivery for your eCommerce business.

Why Offering COD, VAT, and Local Delivery is Essential In 2025?

In 2025, eCommerce success does not entirely rely on products. Offering a cash-on-delivery option, applying the correct VAT, and enabling local delivery has become important now. But why?

Let’s have a look to get the answer:

Improves Customer Trust and Satisfaction

If you add COD to store, it removes the biggest worry customers have about online shopping. They don’t have to give their credit card details to unknown stores. Buy Now Pay Later transactions in the United States were estimated at $133 billion in 2024, showing that customers want flexible payment options.

When customers see COD as an option, they feel safer. This means more people will buy from your store.

Expands Your Customer Base

Not everyone has a credit card or likes to shop online with a card. COD opens your store to these customers. Local delivery enables you to reach people in your area who prefer fast shipping.

2024 U.S. ecommerce sales reached $1.192 trillion, which is more than double what they were five years prior. Adding COD and local delivery helps you get a bigger share of this market.

Helps Follow Local Tax and Shipping Rules

If you setup VAT in eCommerce, it keeps you legal with tax authorities. Most states have substantial sales thresholds for sales tax nexus. The most common is $100,000 in gross annual sales or 200 transactions in the last four quarters.

How to Add COD to Your eCommerce Store

Cash on delivery (COD) allows customers to pay after receiving their orders. This mode of payment helps to win the trust of new buyers who are concerned about online fraud. Let’s find out how to add COD in your eCommerce Store:

Step-by-Step Setup Process

For Shopify Users:

1. Access Payment Settings
2. Go to Admin → Settings → Payments
3. Find the “Manual payment methods” section
4. Enable COD Option
5. Click “Add manual payment method.”
6. Select “Cash on Delivery (COD).”
7. Enter the display name and instructions
8. Configure Settings
9. Set additional fees if needed
10. Choose specific regions for COD
11. Add customer instructions
12. Click “Activate” to save

For WooCommerce Users:

1. Install COD Plugin
2. Download WooCommerce COD extension
3. Install and activate the plugin
4. Configure Payment Method
5. Go to WooCommerce → Settings → Payments
6. Find the “Cash on delivery” option
7. Click “Set up” and enable
8. Customize Options
9. Add title and description
10. Set fee amounts (usually 1-2%)
11. Choose compatible shipping methods
12. Save all changes

Testing Your Setup:

• Place test orders using COD
• Check if order notifications work
• Verify that customer emails are sent
• Test the complete payment flow

How to Add VAT to Your eCommerce Store

VAT (Value Added Tax) or sales tax is a tax that you collect from customers on behalf of the government. In the US, each state has different tax rates and rules. Here is how you can implement it in your eCommerce store:

Implementation Steps

Setting Up Tax Zones:

1. Identify Tax Requirements
2. Research rates for each state you sell to
3. Check if you need nexus in different states
4. Understand digital product tax rules

• Configure Tax Zones
• Create zones for different states
• Set correct tax rates for each zone
• Include local tax rates where applicable

Platform-Specific Setup:

Shopify Tax Configuration:

1. Access eCommerce Tax Configuration
2. Go to Settings → Taxes and duties
3. Review current tax zones
4. Set Tax Rates
5. Add or edit tax zones
6. Enter correct tax percentages
7. Enable automatic tax calculation
8. Configure Display Options
9. Choose tax-inclusive or exclusive pricing
10. Set up tax exemptions if needed
11. Test with different customer locations

WooCommerce Tax Setup:

1. Enable Tax Calculations
2. Go to WooCommerce → Settings → Tax
3. Check “Enable tax rates and calculations”
4. Create Tax Classes
5. Set up standard and reduced rates
6. Add tax rates for each state
7. Save your configuration

How to Add Local Delivery to Your eCommerce Store

Local delivery integration gives you a competitive edge over larger competitors. Customers get their products faster, and you save on shipping costs. During the eCommerce store setup, enabling local delivery helps you meet customer expectations and manage shipping efficiently. The setup process of local delivery in your eCommerce store is as follows:

Setup Process

Define Your Delivery Area:

1. Map Your Coverage Zone
2. Start with a 5-10 mile radius
3. Use zip codes to define boundaries
4. Consider traffic and delivery time
5. Set Delivery Pricing
6. Flat rate pricing (e.g., $5-10 per delivery)
7. Distance-based pricing for larger areas
8. Free delivery for orders over certain amount

Platform Configuration:

Shopify Local Delivery:

1. Create Shipping Zone
2. Go to Settings → Shipping and delivery
3. Click “Create shipping zone”
4. Add your local zip codes
5. Configure Delivery Options
6. Add “Local delivery” shipping method
7. Set delivery rates and timeframes
8. Enable delivery date selection
9. Set Operating Hours
10. Define delivery windows
11. Set cutoff times for same-day delivery
12. Add special instructions

WooCommerce Local Delivery:

1. Install Local Delivery Plugin
2. Search for local delivery extensions
3. Install and activate chosen plugin
4. Configure Delivery Settings
5. Set delivery zones and rates
6. Add delivery time slots
7. Enable customer delivery preferences
8. Customize Checkout
9. Add delivery date picker
10. Include special delivery instructions
11. Set minimum order requirements

Common Mistakes to Avoid While Adding COD, VAT, and Local Delivery

Here are common mistakes to avoid:

Forgetting to Test COD Payment Flow

Always test your COD setup by placing a test order. Check that the order shows up in your admin and you get the proper notifications.

Misconfiguring VAT Rules Across Countries

Tax rules vary by state. Check tax rates for each state you sell to and update rates when they change.

Offering Local Delivery Without Coverage

Don’t promise delivery to areas you can’t reach. Only offer local delivery where it is feasible.

Final Thoughts

Installing COD, VAT, and local delivery would be a game-changer in your e-commerce business. These functionalities create customer confidence, and you secure the legal requirements and gain an advantage over your competitors at the local market.

Although setting it up may seem complicated, the benefits are well worth it. Looking ahead, you will experience more conversions, delighted customers and improved business.

Do you need professional help with setting up these features? CartCoders offers development and customisation for eCommerce.

CartCoders is familiar with the most popular e-commerce platforms, including Shopify, WooCommerce, Magento, and BigCommerce. We offer local shipping, COD, and VAT, and ensure your setup is correct the first time, so you don’t waste time and risk making costly mistakes. Contact CartCoders today.