Cash On Delivery - COD

AAA

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.

VIDEO

Loading the player...
RELATED TERMS
  1. Uniform Bill Of Lading

    An agreement between an exporter and a carrier regarding property ...
  2. Default

    1. The failure to promptly pay interest or principal when due. ...
  3. Bill Of Sale

    A document that details in writing a sale of goods or transfer ...
  4. Lockbox Banking

    A service provided by banks to companies for the receipt of payment ...
  5. Certified Check

    A type of check where the issuing bank guarantees the recipient ...
  6. Delivered Duty Paid - DDP

    A transaction in which the seller must pay for all of the costs ...
RELATED FAQS
  1. What's the difference between cash-on-delivery differ and delivery against payment?

    Cash on delivery and delivery versus payment describe different procedures and timing of payments. Cash on delivery describes ... Read Full Answer >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. How can I calculate funds from operation in Excel?

    In general, the terms "work in progress" and "work in process" are used interchangeably to refer to products midway through ... Read Full Answer >>
Related Articles
  1. Economics

    Explaining Cash On Delivery

    Cash on delivery, also referred to as COD, is a method of shipping goods to buyers who do not have credit terms with the seller.
  2. Economics

    Understanding Management by Objectives

    Management by objectives is a process in which a manager and an employee agree on specific performance goals and then develop a plan to reach those goals.
  3. Economics

    What Does Going Concern Mean?

    Going concern is a concept used in business and accounting to describe the fiscal health of a company.
  4. Fundamental Analysis

    Calculating the Capacity Utilization Rate

    Capacity utilization rate is a ratio used to compare a current usage level against a maximum potential level.
  5. Economics

    Explaining the Supply Chain

    A supply chain is the cumulative network involved in moving raw materials, components and finished products from original suppliers to end users.
  6. Credit & Loans

    Should You Use Credit Cards To Fund Your Business?

    We give you 4 reasons to consider using a credit card instead of a business loan to fund your business, and how to be smart about it.
  7. Economics

    What is Normal Profit?

    Normal profit is an economic term that means zero economic profit.
  8. Economics

    Understanding Organizational Behavior

    Organizational behavior is the study of how humans interact in group environments.
  9. Economics

    Understanding Implicit Costs

    An implicit cost is any cost associated with not taking a certain action.
  10. Economics

    What are Deliverables?

    Deliverables is a project management term describing an object or function that must be provided or completed by a certain due date.

You May Also Like

Hot Definitions
  1. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  2. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  3. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  4. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  5. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  6. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!