How cash on delivery works
Cash on delivery is a deferred payment service offered by carriers and delivery companies to merchants and shippers. In French, this method is known as “livraison contre remboursement.” The process allows end consumers to pay for their purchases only upon receipt of the goods, rather than paying upfront when placing an order.
When using COD, the shipper books a delivery service with their chosen carrier. Shipping costs are typically settled before the package is sent according to the provider’s conditions. The COD service amount must be indicated on the dispatch note if not paid at the time of booking.
Key characteristics
The defining feature of cash on delivery is that payment is made by the end customer directly to the deliverer or carrier at the point of delivery. This places the responsibility for collecting payment on the delivery person, who must then return the collected amount to the shipper in exchange for remuneration for the service.
While payment was originally made in cash, modern COD services also accept cheques and bank card payments. The costs for COD services may be structured as flat-rate fees or calculated based on the value of the products being delivered.
Benefits and considerations
Cash on delivery is particularly valuable for reassuring customers who are hesitant to order online or make advance payments. This payment method can help reduce barriers to purchase and increase conversion rates for e-commerce businesses.
However, shippers should be aware that COD can be costly if goods are frequently returned without payment. Additionally, it’s important to note that standard COD services typically provide no protection against package loss or damage.
The carrier returns the collected sum to the shipper within a period defined by the transport provider’s general conditions of sale. Unless otherwise specified in these conditions, the standard period for returning collected funds is 8 working days from the delivery date.
