What To Know About Cash on Delivery
By Pierre Mouchette | Bits-n-Pieces
Cash on delivery, or COD, is a payment method that allows buyers to wait until they receive the goods they have ordered before paying for them. Also known as collect on delivery, this method does not necessarily require physical cash for payment. Checks, credit cards, debit cards, and other payment methods are commonly accepted, depending on the business's specific terms. Offering an option for COD payments presents significant risks to sellers but also brings distinct advantages.
How does COD work?
The COD process starts much like any other sale with a customer creating an order online, over the phone, or in person and providing their name, shipping address, and contact information. However, unlike conventional shopping methods, COD customers do not pay for their items at the time of the order, and payment is not due until that order is delivered, although sometimes shipping costs or a deposit may be due immediately upon ordering.
What types of businesses benefit from COD?
The following are a few business types that COD arrangements have made a difference:
Benefits of COD
COD delivery also transfers most of the risk associated with sales from the buyer to the seller, and there is no guarantee that the seller will ever get paid. In addition, with COD, customers are free to change their minds for any reason and refuse delivery, which results in lost profits and the additional cost of shipping merchandise back to you.