COD Full Form

COD Full Form


Introduction

The full form of COD stands for Cash on Delivery. It can be defined as a modern mode of payment system made for online purchases under which the buyer buys goods from online platforms, websites, etc. and processes its payment at a later date, i.e., at the time of receipt of the goods either in cash or by debit/credit card via the delivery agent.

How Does COD Work?

  • This is an easy mode of payment. Under this payment system, the delivery agent collects the bill amount against an order from its consignee in cash once the consignment is delivered. The cash collected is then deposited at the nearby office of the e-commerce company which sold the goods. This is one of the easiest, most convenient and most satisfactory payment modes for both buyer and seller.
  • Also, money handling becomes easy and evacuates complex processes making it further convenient for the seller. Sales proceeds are instantly realized, ruling out the possibility of payment failure.
  • For the buyer, cash on delivery mode is a safer payment option as it is processed only after the consignment is delivered and the buyer is satisfied with the goods delivered. The buyer may reject the package if the product is damaged or has been wrongly delivered.
  • This process involves the placement and execution of the order. The buyer’s payment is processed to the supplier once the product is delivered. This process starts from the moment the order is placed.
  • Generally, e-commerce companies ship sold products/consignments through their internal logistics or hire a separate logistic partner to deliver consignment and collection of payments.
  • Once the order is placed with the e-commerce company, the consignment is sourced from a supplier. An invoice cum delivery challan is prepared, which is attached with the consignment for easy delivery.
  • After which, the consignment with the attached invoice is handed over to the logistics company to deliver the order to its destination and collect the payment. Moving further, the delivery man takes the consignment to the buyer and collects the payment in cash or card payment at his doorstep.
  • For card payment, the delivery executive carries a card swiping machine. After collecting the billed amount, the agent deposits the collected amount in his office, which the logistics company, in turn, hands over to the supplier after deducting the handling charges.

“The greatest importance of cash on delivery is trust. Once received at the customer’s doorstep, the product is reviewed, checked, and only the payment is processed. All the major e-commerce companies like Amazon offer the service of (COD) cash-on-delivery.”