What is Cash on Delivery?

Cash on delivery, also known as COD, is a method of payment for goods received, which will be delivered. Payment is given at the time delivery is accomplished. COD doesn’t always mean cash as a payment, but certainly can also mean cashier’s check, credit card or personal check. It really depends upon the establishment from which you’re purchasing something, as to what forms of payment are acceptable.

Probably one of the most highly practiced forms of cash on delivery today is one we think very little of, but in the US, use often: pizza delivery. It’s hard to guess just how many pizzas may be delivered on a daily basis, and the number is probably staggering if you look at a year’s worth of COD transactions of this type. It is true some people now pay over the phone prior to having their pizza delivered, but many still present the delivery person with cash or check, and hopefully a suitable tip.

Other types of cash on delivery may revolve around deliveries of furniture, computer equipment and the like. Similar to COD is the practice of not billing credit cards until ordered catalog or Internet products have been shipped. It’s more difficult to find these types of transactions for things sent through the regular US Postal Service or other companies like United Parcel Service®. However, if you have something mailed to you that did not contain adequate postage, you may need to make a trip to the post office and pay the balance amount of postage in order to redeem your package.

In some ways cash on delivery is a means of protecting the consumer from a seller who would take money and then fail to deliver agreed upon items. However, any scrupulous retail establishment will do all they can to make certain that they deliver items as promised. They may be less willing to trust the customer, and wish for payment prior to delivery in order to make sure they get payment, and don’t have to pay a delivery person to attempt delivery when the customer has no intent to pay for the item.