Cash on delivery - what is it?

Recently, the purchase of goods through the Internet is becoming more and more popular. Naturally, it involves some risks, because the buyer and seller are not that they do not know each other - they do not even see! Different methods of payment and delivery of goods make it possible to secure one or both counterparties. Today we will talk about such payment method as cash on delivery. This method of payment is beneficial and fairly safe for both the seller and the buyer.

What is cash on delivery? This payment by the buyer of the goods only after it was delivered to his city in the courier service warehouse or at the post office. In this case, the buyer has the right to refuse to receive the delivered goods and not pay for them. On the one hand, it may seem that in this case sending goods by cash on delivery is unprofitable and dangerous for the seller, but this is not so. After all the seller will receive the goods back, and its losses will be reduced only to payment of services of courier service. On the other hand, the buyer can be sure that he will receive the goods in the proper quality and completeness, as he will have the opportunity to check his condition before paying the cost of the purchase and delivery.

Thus, in such a transaction as cash on delivery, two counterparties (buyer and seller) and one intermediary-courier service take part. The scheme of the transaction is as follows: the buyer and the seller in advance specify the subject of purchase, its price, equipment and status and agree to make payment by cash on delivery. After that the seller transfers the goods and the receiver's coordinates to the courier service. In this case, in return for the goods, he receives a declaration, the number of which informs the buyer. This declaration serves as evidence that the courier has actually accepted the goods and undertakes to deliver it in due time to the buyer in the proper condition (in foreign practice the term AGO is used - apparent good order). After the delivery is carried out, the buyer comes to the intermediary and informs him the number of the consignment note, according to which he must receive the goods, while presenting the documents proving his identity. After receiving the goods and checking the completeness and condition of the goods, he agrees or refuses to pay for the goods. Depending on his decision, the courier sends the seller either money or returned goods.

The use of such a means of payment as cash on delivery has both positive and negative sides. To positive, of course, can be attributed a higher reliability of the transaction for the buyer, because he can make sure that the goods meet its requirements before paying it. The seller is also protected, because he does not need to rely on the honesty of the buyer as it is necessary to do in the "payment after delivery" method, and even if the buyer refuses the goods, he will only have to pay for the transportation of the goods to and from the destination.

However, you have to pay for everything. Cash on delivery is less effective than other methods of payment, in terms of the cost of financial resources: the participation of a courier who acts as a mutual guarantor for the seller and buyer, and delivers, requires additional costs of money. However, taking into account the fact that the cost of courier services for the delivery of expensive goods may not reach one percent of the transaction amount (for example, when buying and selling expensive SLR cameras), such costs should definitely be made for the sake of safety and tranquility of both counterparties. The main thing is to find a reliable courier with a good reputation, which will be trusted by both sides.