Cash on Delivery Explained

When a business offers cash on delivery (COD) as a payment option, it means that customers can pay for their goods or services when they receive them. COD is an alternative to pre-payment, and can be used for almost any transaction, including online purchases, phone orders, services, or goods received through the mail.

How Does It Work?

When customers are ordering a product or service and they select COD as their payment method, they will typically be required to provide a valid form of identification and contact information. Once the order is received, the customer pays the full amount upon delivery.

Advantages of COD

Using a COD payment option has several advantages. For businesses, COD eliminates any risk associated with non-payment. COD also helps to increase customer satisfaction because it gives customers the flexibility to pay after they receive their items. COD also eliminates credit card fraud and payment disputes.

Disadvantages of COD

The biggest disadvantage of COD is the potential for customers not to pay upon delivery. In addition, businesses must pay fees for processing payments and have the available funds to cover the amounts being delivered. Lastly, the COD process adds delays since it requires extra steps for payment to be processed.

Conclusion

Cash on delivery is a useful payment option that businesses can use to give their customers the flexibility to pay after receiving their items. While there are advantages to COD, businesses should consider the potential risks and fees associated with it.