Cash On Delivery - COD

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DEFINITION of 'Cash On Delivery - COD'

A type of transaction in which payment for a good is made at the time of delivery. If the purchaser does not make payment when the good is delivered, then the good will be returned to the seller.

Payment can be made by cash, certified check or money order, depending on what is stipulated in the shipping contract.

INVESTOPEDIA EXPLAINS 'Cash On Delivery - COD'

This type of transaction is usually done through a shipping company and allows both the seller and the buyer of the product to minimize the risk of fraud or default. COD allows the purchaser to pay at the time of delivery instead of having to pay upfront. Payment is made to the shipping company, and the shipping company then relays the payment back to the seller.

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RELATED FAQS
  1. When should I send my master Bill of Lading?

    A master bill of lading should be sent when a carrier leaves a shipping terminal or dock to ship goods to a receiver or shipping ... Read Full Answer >>
  2. Does cash-on-delivery aid produce better results than a loan?

    Very little empirical evidence has been collected that can be used to directly compare the results of cash on delivery, or ... Read Full Answer >>
  3. Does identity theft or credit card fraud also occur with cash-on-delivery?

    While cash on delivery (COD) is a system intended to typically reduce risk and fraud, as with any type of financial transaction ... Read Full Answer >>
  4. Does the consumer or seller benefit more from a cash-on-delivery transaction?

    Cash-on-delivery (COD) systems reduce the risk of fraud or default for both the buyer and the seller, but it would be impossible ... Read Full Answer >>
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