Cash on delivery: what is it? Advantages and disadvantages of cash on delivery

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

When ordering various goods in online stores, you most likely saw the item "cash on delivery" in the list of delivery and payment options for the purchase. What is it?

Definition

Cash on delivery is a type of payment in which the buyer receives the goods at the post office only after he pays the employees of the branch a certain amount.

What is included in the cash on delivery amount?

Those who have already de alt with this method of payment know that the final amount of the declared value (that is, just the money that the buyer pays in the mail) is slightly higher than the price of the goods indicated in the online catalog itself. store.

This is due to the fact that the amount of cash on delivery, in addition to the actual cost of the goods, as a rule, also includes the costs associated with packing and shipping the order.

In addition, each buyer pays a certain percentage of the declared value of the parcel in accordance with the tariffs of the mail itself - this money is needed so that the post office will subsequently send the funds paid by the buyer to the sender.

But, as they say, "the wolf is not as scary as it is drawn":in addition to the main amount at the post office, the buyer pays no more than 100-300 rubles (it all depends on the price of the product itself). Of course, the fact how expensive the purchase is in itself matters, because basically everything is calculated in percentages.

How do I send cash on delivery?

This information will be useful for sellers who want to send goods using cash on delivery. You already know what it is, which means it’s easy to imagine how the sending procedure works approximately.

First of all, the seller must indicate his intention to send the parcel to the postal workers. At the office, he receives an empty postal order form, as well as 2 forms for completing an inventory (as when sending a valuable parcel).

The seller fills in the postal transfer in his own name on behalf of the buyer. In addition to the estimated shipping cost, the amount must also include 8% of the commission charged by the post office for the delivery of valuable packages.

After the postal worker checks the documents, the mail order form is attached to the parcel post. The seller is issued a postal receipt and an inventory form certified by mail.

The buyer, in turn, can receive the purchase only after he pays for the goods - this is cash on delivery. The fees on both sides are quite low, but they must be taken into account in order for the process of forwarding and delivery of the order to go smoothly.

Advantages and disadvantages of cash on delivery for buyers

The main advantage thatIn this regard, cash on delivery is a kind of guarantee for the buyer. After all, you pay not for some ephemeral product that may not be sent to you at all (many do not trust online stores for this very reason), but for a parcel that is already in the department. As soon as you pay the required amount, the shipment is transferred to you, that is, you receive your order. Because cash on delivery is so popular, it is really beneficial for the buyer: you do not need to pay for the parcel immediately after placing the order - there is still a certain margin of time until the goods arrive at the post office.

As for the shortcomings, first of all it is the need to overpay a certain amount, albeit a small one. In addition, it is impossible to inspect the contents of the parcel before payment. And if an unscrupulous seller sent you something completely different from what you ordered, you can only contact the police.

Advantages and disadvantages of cash on delivery for merchants

If you send cash on delivery items (or any other items), you are guaranteed to get paid for them.

Among the shortcomings, first of all, it should be noted the risk that the client simply does not pick up his order, and the goods will be sent back to you. And everything would be fine, but only sending by mail itself takes a lot of time (from 3-5 days to several weeks). As a result, there is a risk of delay in turnover and, as a result, the online store incurs losses.

However, despite occasional misunderstandings, many sellers are confident when choosingcash on delivery is one of the most popular payment methods. There is no doubt - thousands of online stores successfully send products in this way, and millions of buyers are happy to pick up their long-awaited purchases from the post office.

We have told you about the main risks, but you should understand that risks are just possible situations that rarely occur in practice.