Full-Form of COD

COD stands for Cash on Delivery, and it means that payment will be made at the time of delivery with no exceptions. It is a modern payment method designed for online transactions. The buyer orders products and processes payment later, either in cash or by debit/credit card through the delivery agency. Cash on delivery is a payment option that allows customers to pay for their purchases only when they receive them. This method is convenient for customers who are unsure about the quality of the product or have concerns about online payment security.

How does COD Work?

This method of payment is simple. When a consignment is delivered, the delivery agent takes cash from the consignee to pay the bill amount associated with the order. The money is then sent to the local office of the online retailer that sells the products. For both the buyer and the seller, this is one of the simplest, most practical, and most effective payment methods. Additionally, managing money is made simple, and complicated procedures are eliminated, which is more convenient for the seller. Sales proceeds are realised right away, eliminating the chance of payment failure.

Simply put, customers have the option to order anything online and request delivery. Payment is made by the customer upon delivery, rather than during the ordering process. If the goods have been damaged or have been delivered in the wrong way, the buyer has the right to reject the delivery. The placing and carrying out of the order are included in this entire process. Once the product is delivered, the buyer’s payment is handled by the supplier. 

E-commerce businesses usually rely on their internal logistics to transport sold goods and consignments, or they hire a different logistics partner to deliver consignments and collect payments. The consignment is sourced from a supplier once the order is placed with the online retailer. For simple delivery, a prepared invoice and delivery challan are included with the consignment. The logistics company then receives the shipment and the linked invoice to deliver the order to its destination and collect payment. Later on, the delivery person delivers the package to the customer and takes the cash or credit card payment at his door. The delivery agent has a card reader with him for card payments. After receiving payment for the services rendered, the agent deposits the amount received in his office. The logistics provider then transfers the funds to the supplier after deducting handling fees.