RTO is triggered after a shipment exhausts its NDR re-attempts, or when the buyer refuses the parcel — most often on COD. The seller pays freight in both directions plus handling, and inventory stays locked in transit for days, which is why RTO is treated as a core profitability metric and not just an ops number.
COD orders in India typically see materially higher RTO than prepaid. Address verification, buyer confirmation on NDR, and COD-to-prepaid nudges are the usual levers to bring it down.