Why cash on delivery (COD) matters to a first-time founder
COD can let a seller reach buyers who will not prepay, but refused deliveries, cash handling and carrier fees can erode the margin. Available payment methods, consumer cancellation rights, tax documents and carrier responsibilities differ by country, so confirm the local service before offering it.
Examples of cash on delivery (COD)
An online retailer ships a $70 appliance under COD. The courier collects $70 from the customer at delivery, issues a receipt and transfers the money to the retailer after deducting a $4 service fee. If the customer refuses the parcel, the retailer pays the return cost.
Common misunderstanding
COD does not always mean physical cash. Depending on the carrier and country, the recipient may pay by card, bank transfer or another approved method at delivery. It also does not guarantee acceptance: the customer can still refuse the parcel, subject to local contract and consumer rules.
When to use it
Offer COD only where customers need it and the carrier supports secure collection, clear proof and prompt settlement. Price the fee and failed-delivery rate into your decision. For digital services, subscriptions or low-margin goods, advance electronic payment is usually simpler and less exposed to refusal.