Cash on delivery: what is it? Advantages and disadvantages of sending cash on delivery

When ordering various goods in online stores, you most likely saw the item "cash on delivery" in the list of delivery options and payment for the purchase. What it is?

Definition

Cash on delivery is a type of payment in which the buyer receives the goods at the post office only after paying a certain amount to the employees of the branch.

What is included in the amount of COD?

Those who have already dealt with this method of payment know that the final amount of the declared value (that is, exactly the money that the buyer makes in the mail) is slightly higher than the price of the goods specified in the catalog of the online store.

This is due to the fact that the amount of cash on delivery, in addition to the actual value of the goods, usually includes also the costs associated with packing and forwarding the order.

In addition, each buyer pays a certain percentage of the declared value of the parcel in accordance with the tariffs of the mail itself - this money is needed in order that subsequently the mail sent the funds brought by the buyer to the sender.

But, as they say, "the wolf is not so terrible as it is painted": in addition to the principal amount at the post office, the buyer pays not more than 100-300 rubles (all depends on the price of the goods themselves). Of course, it matters how expensive the purchase is in itself, because basically everything is calculated as a percentage.

How do I send the goods by cash on delivery?

This information will be useful for sellers who want to ship goods using cash on delivery. What is it, you already know - then it is easy to imagine how the sending procedure is about to happen.

To begin with, the seller must inform about his intention to send the parcel to the postal workers. In the office, he receives an empty postal order form in his hands, as well as 2 forms for registering the inventory (as when sending a valuable parcels).

Postal transfer seller fills in his name on behalf of the buyer. In addition to the estimated cost of delivery, the amount also includes 8% of the commission charged by mail for the delivery of valuable parcels.

After the mail worker checks the documents, the mail order form is attached to the parcel post. The seller receives a postal receipt and an inventory form certified by mail.

The buyer, in turn, can receive a purchase only after paying for the goods - this is the cash on delivery. Tariffs on both sides are rather small, but they must be taken into consideration so that the process of sending and delivering the order goes smoothly.

Advantages and disadvantages of cash on delivery for customers

The main advantage that the cash payment has in this respect is a certain guarantee for the buyer. After all, you do not pay for some ephemeral goods, which you may not be sent at all (many do not trust online stores for this reason), but for a parcel that is already in the office. As soon as you make the required amount, the parcel is sent to you, that is, you receive your order. Because such a huge cash payment is so popular that it is really beneficial for the buyer: you do not need to pay the parcel immediately after placing an order - there is still a certain amount of time until the goods arrive at the post office.

As for the shortcomings, first of all it is the need to overpay a certain amount, albeit small. In addition, you can not inspect the contents of the parcel before payment. And if an unscrupulous seller sent you not at all what you ordered, you can only contact the police.

Advantages and disadvantages of cash on delivery for sellers

If you send things by cash on delivery (or any other goods), you are guaranteed to receive payment for them.

Of the shortcomings in the first place, we should note the risk that the customer simply does not pick up his order, and the goods will be sent back to you. And all would be nothing, but that's only by itself sending by mail takes a lot of time (from 3-5 days to several weeks). As a result, there is a risk of a delay in turnover and, as a consequence, the online store incurs losses.

However, in spite of sometimes misunderstanding, many sellers are sure, choosing a cash on delivery, that this is one of the most popular payment methods. It is not necessary to doubt - thousands of online stores successfully send products in this way, and millions of buyers are happy to take long-awaited purchases from the post office.

We told you about the main risks, but it should be understood that the risks are only possible situations, which in practice occur very rarely.