January 23rd, 2025

Cash on Delivery – What You Need to Know

What Is Cash on Delivery and Why Is It Popular? Cash on Delivery (COD) is a payment method where the buyer pays for the ordered product only after receiving it. This method is popular worldwide, especially in countries where trust in online payments is lower. Customers prefer COD because it offers greater control and security in...

What Is Cash on Delivery and Why Is It Popular?

Cash on Delivery (COD) is a payment method where the buyer pays for the ordered product only upon receiving it.

This method is popular worldwide, especially in countries with lower trust in online payments. Customers prefer COD because it provides greater control and security when shopping.

Cash payments versus card payments is a long-standing debate. The advantages of cash include anonymity and transaction privacy.

On the other hand, paying by card means you pay for the product in advance, which can help avoid potential issues—such as the courier not having enough change or leaving the package if you’re not home, since it’s already paid for.

Cash handling and collection are strictly regulated under the Law on Prevention of Money Laundering and Terrorism Financing.

According to legal provisions, individuals and businesses conducting registered activities must follow rules that prohibit cash transactions (banknotes) of €10,000 or more.

How Does Cash on Delivery Work?

Studies show that over 60% of people still pay in cash. However, this payment method slows down delivery services and significantly increases costs and complexity.

Steps in the COD Process:

  1. The buyer orders a product online or by phone, selecting “Cash on Delivery” as the payment option.
  2. The product is shipped via a courier service, which takes responsibility for collecting payment.
  3. The buyer pays for the order at the time of delivery, either in cash or by card, depending on the courier’s options.

Participants in the Transaction:

  • Buyer: Receives the goods and pays upon delivery.
  • Seller: The company or individual selling the product.
  • Courier Service: Acts as an intermediary between seller and buyer, ensuring delivery and payment collection.

Advantages of Cash on Delivery

COD offers several key benefits, especially for buyers who are wary of online transactions:

  • Security for the buyer: No need to provide financial details in advance.
  • Increased trust: Buyers can inspect the product before paying.
  • Accessibility: Ideal for customers without access to credit cards or online payment methods.

Disadvantages of Cash on Delivery

While popular, COD has certain challenges, particularly for sellers:

  • Higher costs: Couriers often charge extra for handling COD transactions (around €0.90).
  • Risk for sellers: Buyers may refuse to accept the order, leading to losses.
  • More complex logistics: Processing COD orders requires additional steps.

Who Uses Cash on Delivery the Most?

cod-packages-dostava

Cash on Delivery (COD) is especially popular in regions with low digital adoption and limited trust in online transactions. It is most commonly used by older populations, such as retirees, due to a lack of familiarity with digital services and established habits.

The typical users include:

  • Buyers without access to credit cards.
  • Older individuals who prefer traditional payment methods.
  • Customers in rural areas with limited internet access.

COD is particularly widespread in countries like India, Turkey, and parts of Eastern Europe.

Cash on Delivery vs. Online Payments

Both methods allow secure transactions between buyers and sellers.

Key differences:

  • COD requires physical interaction (delivery and payment), while online payments are entirely digital.
  • COD is slower due to additional logistics, whereas online payments are fast and automated.

Tips for Using Cash on Delivery

For Buyers:

  • Verify the authenticity of the store before placing an order.
  • Make sure you have the necessary cash or card ready on delivery day.

For Sellers:

  • Clearly communicate payment terms and return policies.
  • Track refused deliveries to minimize losses.

Can you cancel an order after it has been shipped?
Yes, but it may incur return costs for the seller. Always check the store’s terms and conditions.

What if the goods don’t arrive?
Contact the store or courier service to initiate a complaint. This issue has been discussed in detail in our article: “Shipment Stuck at Customs.”

In Conclusion

Cash on Delivery provides extra security and convenience, especially for buyers without access to online payments. However, it involves additional costs and requires careful attention from both sellers and buyers. Card payments are transparent and speed up the process. Still, without educating the older population, a full shift to card payments is unlikely in the near future.

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Mail Boxes Etc./MBE centers operate through independent franchisees under the MBE brand. Through its franchise network, Mail Boxes Etc. provides support services for businesses and individuals. Logistics and shipping services are MBE’s core offerings—facilitated through agreements MBE makes for the benefit of its franchisees with major domestic and international express couriers—along with other graphic and printing services, provided either directly or through agreements with large printing centers. Promotion of services to business and private customers is carried out as part of the business activities of each MBE franchise partner, both inside and outside MBE centers ("farming"). Each franchise partner is contractually obligated to perform such activities. Mail Boxes Etc. and MBE are registered trademarks used with permission from Fortidia – a registered trademark of MBE Worldwide S.p.A – (All rights reserved). Services offered by individual MBE centers may vary by location. The materials available on this website, the information contained herein, and any other relevant data may not be copied, distributed, modified, republished, reproduced, downloaded, or forwarded to third parties in any way without the express prior written consent of Sistema Italia 93 S.r.l. We accept no responsibility for unauthorized use of the materials, information, and/or data available on this website.


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