Cash on delivery

Cash on delivery (COD), sometimes called payment on delivery,[1] cash on demand, payment on demand or collect on delivery[2] is the sale of goods by mail order where payment is made on delivery rather than in advance. If the goods are not paid for, they are returned to the retailer.[3] Originally, the term applied only to payment by cash but as other forms of payment have become more common, the word "cash" has sometimes been replaced with the word "collect" to include transactions by checks, money orders, credit cards or debit cards.

For the 2006 Ray Cash album, see Cash on Delivery (album). For the 1956 British comedy film also known as "Cash on Delivery", see To Dorothy a Son.
A British cash on delivery registered letter from 1940s London showing 4s 7d due on delivery.

Advantages and disadvantages for retailers

Advantages of COD for online or mail order retailers:

  • The customer does not need to own a credit card to purchase.
  • Impulse purchases may increase as payment is not due at the time of ordering.
  • The credibility of retailers may be increased because the consumer only has to pay when the item is delivered.

Disadvantages of COD for online or mail order retailers:

  • Orders might be returned as buyers are less committed to the purchase than if they had paid in advance (which led to the eventual elimination of C.O.D. with many TV offers in the United States and Canada by the early 1980s).
  • Logistics partners charge additional fees for COD orders.

Limits

Most operators impose a limit on the amount of money that can be collected per delivery or per day using COD services. Limits may be higher for non-cash payments. Canada Post, for instance, applies a limit of C$1,000 for cash, but C$5,000 for payment by check or money order.[4]

Popularity in the developing world

In some countries COD remains a popular option with internet-based retailers, since it is far easier to set up for small businesses and does not require the purchaser to have a credit card. Many small businesses prefer cash payment to credit card payment, as it avoids credit card processing fees. Some shops also offer discounts if paid in cash, because they can offer a better price to the consumer.

COD is a widely used model in India.[5] The overwhelming majority of e-shopping transactions in the Middle East are COD. Sixty percent of online transactions in the UAE and Middle East are done by cash on delivery[6] and this has also led to the growth of courier companies offering a COD service.[7]

See also

References
  1. https://www.ldoceonline.com/dictionary/payment-on-delivery
  2. "Cash on Delivery (COD)".
  3. Cash On Delivery – COD Investopedia, 2013. Retrieved 28 December 2013.
  4. Collect on Delivery (COD). Canada Post, 2013. Retrieved 28 December 2013. Archived here.
  5. Jalote, Pankaj; Natarajan, Pari (2019). "The Growth and Evolution of India's Software Industry". Communications of the ACM. Vol. 62, no. 11. pp. 64–69. doi:10.1145/3347863. Retrieved 2020-08-28.
  6. Hamid, Triska (2014-05-14). "Cash on delivery the biggest obstacle to e-commerce in UAE and region". Plugged In. The National. Abu Dhabi. Archived from the original on 15 May 2014.
  7. "Cash on Delivery: Courier Perspective". Parzel Express. 2014-11-17. Archived from the original on 2014-12-14.
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