Britannica Money

cash on delivery

business
Also known as: C.O.D., collect on delivery
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also called:
collect on delivery

cash on delivery (C.O.D.), a common business term indicating that goods must be paid for at the time of delivery. The payment is usually due in cash but may be made by check if acceptable to the seller.

The transfer agent very often used is the postal service, but it is common for consumer and business shipments to be sent C.O.D. by express companies, commercial truck forwarders, or the seller’s own delivery organization. Cash on delivery sales usually involve a collection charge levied by the delivery agent and usually paid by the buyer. In retailing and wholesaling transactions, shipments are made on a C.O.D. basis when the buyer does not have a credit account with the seller and does not choose to pay in advance. C.O.D. terms are also often used when the amounts involved are small and the cost of advancing credit would be high in proportion to the size of the purchase. C.O.D. general postal service was first introduced in Switzerland in 1849, India and Australia in 1877, the United States in 1913, Canada in 1922, and Great Britain in 1926.

This article was most recently revised and updated by Michael Ray.