Cash on delivery (COD)
COD is a financial transaction where the payment of products and services received is made at the time of actual delivery than paid for in advance. The term is mainly applied to products purchased from a third party, and payment is made to the deliverer. The concept of cash, in this case, is often blurred because most companies also accept checks, credit cards, or debit cards [Pagani, 169].
Cash on delivery (C.O.D.), also called collect on delivery, is a common business term indicating that goods must be paid for at the time of delivery. The payment is usually due in cash but may be made by check if acceptable to the seller.
The transfer agent is often the postal service. Still, it is common for consumer and business shipments to be sent C.O.D. by express companies, commercial truck forwarders, or the seller’s delivery organization. Cash on delivery sales usually involves a collection charge levied by the delivery agent and is usually paid by the buyer. In retailing and wholesaling transactions, shipments are made on a C.O.D. basis when the buyer does not have a credit account with the seller and does not choose to pay in advance. C.O.D. terms are also often used when the amounts involved are small, and the cost of advancing credit would be high in proportion to the purchase size. C.O.D. general postal service was first introduced in Switzerland in 1849, India and Australia in 1877, the United States in 1913, Canada in 1922, and Great Britain in 1926 [Britannica].
Pagani, Margherita. (2008). Encyclopedia of multimedia technology and networking (2nd ed). Hershey, New York: Information Science Reference.
Cash on delivery. Encyclopedia Britannica. Retrieved from: https://www.britannica.com/topic/cash-on-delivery.