Return to Origin (RTO)
Also known as: RTO · Return to origin
Return to Origin (RTO) is the percentage of cash-on-delivery orders that never reach the customer or are refused at the doorstep — the package returns to the warehouse instead of being delivered. RTO is the single largest cost driver in COD e-commerce.
Without confirmation infrastructure, RTO in LATAM COD typically sits at 25-40%. With hard-gated Spanish call-center confirmation and multi-carrier routing, RTO drops to 10-15%.
The cost of an RTO is roughly: packaging + picking + forward courier + reverse courier + lost stock. In LATAM markets this is $4-8 USD per failed order. At 30% RTO on 5,000 orders, that's $6K-12K of pure loss per month — before accounting for the gross margin foregone.
The seven-step RTO reduction playbook is detailed at /how-to-reduce-rto-cod.
Cash on Delivery (COD)
Cash on delivery (COD) is a payment method where customers pay for products at the time of delivery rather than during online checkout. The carrier collects cash from the customer and remits it to the merchant through settlement cycles.
Hard-gated confirmation
Hard-gated confirmation is a COD operational policy where orders are not released to the warehouse for shipping until they have been confirmed by a risk-control call center. If the buyer cannot be reached after the retry SOP completes, the order does not ship.
Reverse logistics
Reverse logistics is the process of routing failed-delivery and refused orders (RTOs) from the carrier back to the merchant\'s warehouse for inspection, restocking, or disposal.
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