Cash on delivery is one of the most salient topics within the magnum sea of shipments. This topic is important both from the point of view of the customer, who has the option of paying at the time of delivery, and from the point of view of those who own a business or company, since cash on delivery is one of the most frequently used and most requested payments by different customers.
But what is meant by cash on delivery? Cash on delivery, as we have mentioned, is a payment method that allows the customer to pay upon delivery; It is a payment that is made directly to the person who delivers the goods and, for this reason, from the seller's point of view, it is a deferred payment.
While from this point of view, the seller might think that C.O.D. is not a very good idea, the statistical data lead one to think differently: it appears that, in fact, a large percentage of users and customers prefer cash on delivery to any other type of digital payment, probably because it makes them feel more secure during their purchase. This factor, however, must also be a bellwether for sellers, who cannot afford to give up this type of payment, as it would mean giving up a large part of their sales.
Let us therefore find out together, in order to have a complete overview of this type of payment, what are the advantages and what are the disadvantages of C.O.D. payment for shipments.
The advantages of cash on delivery payment
As we mentioned in the introduction to this article, many of the users and customers purchasing goods online are reluctant to various digital payments, always preferring cash on delivery or cash on delivery. On this very subject, several studies have been conducted, which have shown that this mistrust of online payments depends on several factors factors, which are as follows:
- the buyer's level of education;
- the age of the purchaser;
- the buyer's level of trust in the seller;
- the buyer's habit of non-cash payments.
Analysing these factors, it is easy to see that older and less educated people are reluctant to use digital payment methods, probably because they have little faith in the world of the web and are not familiar with its infinite possibilities. The fact remains, however, that in order to capture even this large segment of customers, it is necessary to be able to guarantee them the cash-on-delivery service for the various parcel shipments. And this is a first and important advantage offered by this method of payment (which, in fact, is also guaranteed for the international shipments).
In addition, cash on delivery also allows you to overcome the mistrust of those unfamiliar with that particular site or online shop, regardless of their age, education and aptitude for different digital payment methods. It seems, in fact, that regardless of the type of product one wants to buy, 57% of online users and customers are also reluctant to share their credit card details in an online platform and are very careful about their privacy. All these factors translate into a real difficulty in completing any online purchase.
For this reason, it is necessary to offer cash on delivery as one of the various payments, which will then be entrusted to the express courier (which may be, for example, the courier BRT) chosen for dispatch a parcel with goods or products: thus, by also offering this payment method, it is possible to overcome this mistrust of users, who will convert from potential customers into actual customers.
The disadvantages of cash on delivery payment
Now that we have listed the advantages of C.O.D. for shipments, it must be admitted that there are several disadvantages of this payment method, which include all to the detriment of the sellerThe seller, in fact, through the cash-on-delivery method of payment, somehow “anticipates” the goods to the purchaser and who receives payment, as we said before, postponed from the time of purchase.
The first disadvantage we want to mention is the possibility of the parcel rejection with cash on delivery payment: whereas this possibility is very remote with the various digital advance payment methods, with the cash on delivery payment method it is very common. The seller, in this case, is the only one who loses out, as the buyer does not even have to think about returning the goods. More specifically, the seller loses out in the following terms:
- in the costs of shipping costs, both outward (which are not paid by the purchaser) and return;
- the unavailability of the goods he thought he had sold, because he is travelling;
- the costs related to the handling of cash on delivery payments.
To avoid this possibility, the seller can use a double order confirmation system, which is useful to check whether the buyer is really sure of his purchase.
One of the other disadvantages of C.O.D. lies in the possibility that, at the time of delivery, the purchaser does not have the necessary sum to pay for his purchase. In this case, just as in the previous case, it is always only the seller who loses out, in all the aspects we have already listed.
A final disadvantage is related to the fact that cash on delivery collection costs are rather high, especially when compared to the costs associated with other payment methods. The fact that these costs are so high is due to the fact that the express courier service itself has to bear some handling costs. Even for this disadvantage there is, however, a solution: simply opt for the cash on delivery. This particular type of cash on delivery provides that the costs associated with the collection of the cash on delivery are entrusted to and borne by the buyer. This solution, however, does not guarantee that the package can be refused and, in this case, as we saw a few lines ago, the amount will be borne by the seller.
