Cash on Delivery – otherwise known as Cash on Delivery (COD) or return of payment – is a payment technique that consists of collecting payment for the sale online at the time of delivery. As a good financial intermediary, it is then the carrier who is responsible for collecting the amount. He therefore becomes responsible for collection on behalf of the sender, in return for payment. Discover the operation, the advantages and the disadvantages of this method of payment.
CASH ON DELIVERY: HOW DOES IT WORK?
When to pay for the transport service?
The sender pays for this service before sending the package, when booking the transport service. Depending on the carrier, the cost varies. It can for example represent a percentage of the value of the products sent or be based on a minimum package. The COD amount is specified on the packing slip.
When to collect payment for your orders?
The sum collected from the recipient, most often by check, is returned to the sender according to the carrier’s T & Cs: the check made payable to the sender can be sent to him by post or delivered by hand. In the event of payment in cash by the recipient, it is then the carrier who issues a check payable to the sender or makes a transfer to his bank account. To receive the payment, the sender can wait up to 15 days.
There are limitations on the amounts that can be collected. The maximum authorized amounts also depend on the T & Cs of the carrier. So consult them well before offering this payment method!
At Boxtal, for example, we offer cash on delivery option with UPS (excluding relay delivery). This is how it works: the delivery person collects the value you declared for your goods from the recipient when booking the transport service on Boxtal.com. This amount (which you must indicate on the packing slip) is then returned to you at the shipping address within 15 days from the date of delivery. Make your estimate now using our comparator.
CASH ON DELIVERY: WHAT HAPPENS IN THE EVENT OF A PROBLEM?
Refusal of payment by the recipient
If the recipient changes his mind and refuses to pay for the order, then the carrier will repeat the attempt up to three times according to its T & Cs. If all attempts are unsuccessful, the package will be returned to sender. The goods are only delivered against payment. So the seller gets it back! Note, however, that the delivery service is not reimbursed.
Non return of payment by the carrier
In the event of non-return of the amounts due by the carrier, the sender must notify the carrier (and Boxtal if you use our services) in writing within 45 calendar days of the date of delivery.
WHAT ARE THE ADVANTAGES OF COD?
Offering payment by cash on delivery defuses the mistrust that the buyer may have with regard to certain online purchases, in particular when he has to pay an amount he considers high, without being guaranteed to receive his property. Thereafter … With cash on delivery, the buyer is guaranteed to have his order in his hands before paying a single penny! This reassuring effect can allow the e-merchant to generate additional orders from buyers unfamiliar with the Internet or reluctant with regard to certain purchases they consider risky.
To sum up, here are the advantages:
Reassure Internet users before making an online purchase
Ensure online shoppers receive their orders before paying for them
Allow e-merchants to generate more orders
WHAT ARE THE DISADVANTAGES OF COD?
Sending the order before having received its payment represents a certain risk-taking for you, e-merchant. Note that the sender is responsible for all risks associated with the payment: non-payment, insufficient funds in the bank account or counterfeit.
In addition, although low, this service still has a cost. This cost is due even in the event that the recipient ultimately refuses to pay for his order and the package is therefore returned to you. You therefore pay the transport costs no matter what.
In short, here are the cons:
It is a risk for the sender because he is responsible for the non-payment of the order
The cost of freight charge should be paid by the shipper
Cash on delivery shopping online ksa is a technique that can be useful to reach certain buyers’ targets but which represents a risk and a cost for the sender. E-merchants, so take the time to think before you start. If you must use this technique, we recommend that you apply it on low value goods instead. We do not recommend that you exceed certain amounts in any case: up to 10,000 euros for payments by check and 150 euros in cash.