Cash payments on delivery ( COD ), sometimes called collect on submissions , are merchandise sales through postal orders where payments are made on shipping rather than first. If the goods are not paid, they are returned to the retailer. Initially, this term only applies to payments with cash but as other forms of payment have become more common, the word "cash" is sometimes replaced with the word "collect" to enter transactions by check, credit card or debit card.
Video Cash on delivery
Advantages and disadvantages for resellers
Advantages of COD for online order or mail order retailers are:
- Customers do not need to have credit cards to purchase
- Impulse purchases may increase as payment is not due when ordering
- The credibility of resellers can be increased because consumers only have to pay when goods are sent
The main disadvantage for resellers is that more orders will be returned because buyers are less committed to purchases than if they had paid up front.
Maps Cash on delivery
Limit
Most operators impose a limit on the amount of money that can be collected per delivery or per day using COD services. Limits may be higher for non-cash payments. The Canada Post, for example, imposes a limit of C $ 1000 for cash, but C $ 25,000 for payments by check or money order.
Popularity in developing countries
In some countries, COD remains a popular option with internet-based retailers, because it's much easier to manage small businesses and does not require buyers to have credit cards. Many small businesses prefer cash payments for credit card payments, as it avoids credit card processing fees. Some stores also offer discounts if paid in cash, as they can offer better prices to consumers.
The majority of e-shopping transactions in the Middle East are COD. 60% of online transactions in UAE and the Middle East are made with cash on delivery and this also leads to the growth of courier companies offering COD services.
References
External links
- Canadian COD in Canadian Post History Blog
Source of the article : Wikipedia
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