Cash on Delivery (COD)

C.O.D – the abbreviation stands for cash on delivery. It is a type of transaction in which the recipient makes the payment for a good at the time of delivery. This signifies that the payment for the goods is to be made at the time of delivery. It is a payment method where you pay for an item in cash when the courier company delivers the item to you. It can also be referred to as collect on delivery since delivery may allow for cash, check, or electronic payment. It is just another mode of payment you provide to your customers. It is a popular form of payment for purchases made online. It is a relatively risk-free process of buying products and services online.

A COD transaction can take several different forms that affect a company’s accounting in different ways. The payment is usually due in cash but may be made by check if acceptable to the seller. Generally, COD shipping offers customers a time advantage for saving to make a full payment. A payment term under which payment for the shipped goods is to be made to the carrier at the time of delivery. If the buyer is not making payment at the time of delivery, the product returns to the seller without further obligations from the customer. Meaning some methods (normally courier service providers) provide COD service, while some are not.

Working procedure –

  • Buyers place an order on the website and request delivery at the given address.
  • Once the order is placed, an invoice is prepared by the seller which is attached to the parcel.
  • A delivery man picks the shipment from the seller or supplier and delivers it to the address provided by the customer.
  • The customer makes the payment to the delivery boy in cash or card.
  • The COD amount is then deposited to the account of the logistics partner.