Cash On Delivery - COD

  

Cash on delivery means that the item will be paid for when it’s delivered, not in advance...like you would if you were paying with a credit card at the time the order was placed.

To the delivery person, it’s often called “Collect on Delivery.”

For example, say someone is selling a large quantity of fly swatters to a campground resort in your area with C.O.D. terms. If you're the customer and a company selling to you has put you on COD status, it's bad. It means they don't trust you, and that they won't release the goods they're selling to your possession until they have clear and real payment. Think: cashier's check handed to the angry postal worker.

Just to be clear to all parties and ensure this new transaction also goes well, a company could specify to UPS that it was C.O.D., and mark the package with how much and how to collect. Obviously, UPS won’t collect cash, but the seller can specify it only takes cashier checks, or that money orders are acceptable (versus a personal check).

Related or Semi-related Video

Finance: What is Cash on Delivery (COD)?41 Views

00:00

Finance a la shmoop what is cash-on-delivery?

00:05

or CoD well if you have a deadbeat buyer who's taken forever to pay you in [Danny Deadbeat laying on sofa]

00:12

the past think remember Popeye and wimpy borrowing money for burgers next Tuesday

00:18

when he actually never pays you'll eventually have to make that customer

00:21

that deadbeat a COD status purchaser well CoD has nothing to do with cheap

00:28

fish rather it stands for cash on delivery like you get cash when the good

00:33

is delivered and it means that the postal person or UPS gal or FedEx dude

00:37

has to collect the cash you are owed before they will actually leave the [Cash transfers to mail people]

00:42

package being shipped at the warehouse on your doorstep or van parked you know

00:47

down by the river if a client has such bad credit or has such a miserable

00:50

payment record that they have to be put on COD status well you may really have

00:55

to re-evaluate your relationship there COD also carries charges and often

01:01

they're big because a postal worker may have to ring the door eight times before [Postal worker ringing door bell]

01:05

finding the deadbeat at home and then even if he is home well it's uncertain

01:09

whether or not he'll have the ready cash to pay for whatever goods he just

01:13

ordered and sometimes you'd have better odds of getting money out of this thing [Pile of fish appear]

Up Next

Finance: What are Government Bonds?
52 Views

What are government bonds? Uncle Sam needs dough. He sells bonds in the form of T-Bills, T-Notes, Treasury paper of all flavors. His credo? The cre...

Finance: What are Treasury Bills?
15 Views

What are Treasury Bills? Like other debt finance platforms, the US government issues its debt in several ways, and has different terms for each. Tr...

Finance: What are T-Notes, T-Bonds and TIPS?
16 Views

What are T-Notes, T-Bonds, and TIPS? T-Notes are debt securities (like bonds) that are issued by the government and mature within one to 10 years....

Find other enlightening terms in Shmoop Finance Genius Bar(f)