Cash on delivery: advantages and disadvantages

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What does cash on delivery mean? Cash on delivery is a method, usually used in digital sales.

It consists of depositing the payment (usually in cash) to the carrier responsible for placing the delivery at the place of destination set, regardless of having made the purchase transaction virtually.

For example, if we buy a game console in a virtual store, the amount of this operation will not be recharged at that moment, but once the product arrives at our home we must deposit the payment either in cash or through a card.

The courier will make us sign a delivery note that will be the proof of payment and then we will receive the product in hand.

The two sides of the coin: Customer and Seller

It is a payment technique widely used in Spain.

Buying cash on delivery assures the consumer the payment with the product in hand, which makes the process much more transparent and secure. Especially if we take into account all the cons that can terrify a customer who accesses a purchase in an online store (dissatisfaction with the product, unforeseen in the delivery process etc.)

At the end of the day they are making a “blind” purchase.

For the end customer or buyer, it really is a very advantageous form of payment. They are under no obligation to pay if the product does not meet their expectations or if they are simply no longer interested in it.

Neither the online shop, nor the courier company can charge any kind of cost to the buyer in case he cancels the purchase.

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Of course, one of the buyer’s duties is to inform the shop that he no longer needs the product, in order to avoid packaging and shipping costs.

For the seller it can be a riskier payment alternative.

As we explained above, if the customer does not want to assume the payment once the purchase has been delivered, it could mean indirect costs that cannot be cancelled and that he will therefore have to assume.

However, if you decide to opt for this payment option, it is advisable to apply a commission for accessing this type of service, so you will be covered for any unforeseen eventuality.

Advantages common to all involved

Cash on delivery is the safest way to pay online. If you offer this option in your online store, you will surely increase your customer base.

There are always options

For example, as mentioned above, you can charge a commission to the customer if he chooses this type of payment. This should be calculated based on the total cost of the delivery process, so you’ll be covered.

Another option could be to facilitate this payment method to regular customers or VIPs, who have made purchases without any problems in the past.

We hope this article has been very useful for you. If you recommend it to others, share it on your social networks and let us know your comments. Remember that you can find more similar information on our blog.

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