What is Cash On Delivery?Cash on Delivery (COD) is a type of financial transaction in which payment for a product is collected at the actual time of delivery. Since there are now a multitude of ways to send and receive payments immediately, COD has become less and less popular. However, top carrier services like UPS still ship items on COD. UPS will attempt to collect the amount shown on the COD. tag or package label, and then send the payment to you. If UPS cannot collect the payment after three attempts, the package will be returned. When shipping COD, you can use StorePep which automatically sends an email to your customer with the due amount along with shipment status updates. This way, your customers are prepared to accept delivery on the first attempt, and UPS can expedite your payment.
UPS Terms Of ServiceThe following terms of service apply for UPS Cash on Delivery shipments:
- UPS accepts COD for amounts up to US$50,000.00 per shipment.
- UPS will accept a business or personal check, or another negotiable form of payment.
- At the shipper’s request, UPS will accept a cashier’s check or money order.
- The shipper assumes all risk related to the collection of the payment, including non-payment, insufficient funds, and forgery.
Why use COD?Collect On Delivery or COD. minimizes risk for the shipper when it comes to collecting payment for goods. Payments are collected by the truck driver. Packages are delivered only when the payment has been collected. Suppose Company A would like to collect payments for their goods but minimize the processing cost of physical checks and monthly bank fees. They can sign up for a COD contract with FedEx or UPS that would allow the carriers to collect payments on their behalf. Once payment is received, direct payments are given to Company A 2-3 days from the delivery date. The $12.50 charge seems reasonable. However, if you are sending out 30 packages a day at $12.50, that is $375.00 a day! The ideal time to use this service is if you are sending only a few packages a day.
ProcessOnce the order is placed and the Mode of payment is selected as Cash on Delivery the customer can see the following confirmation page.
The payment method automatically gets updated on the store owner’s account. Once the order is placed the label is generated for that particular order which looks like this :