Cash on Delivery (COD)
Also known as: COD · Pago contra reembolso · Cash-on-delivery
Cash on delivery (COD) is a payment method where customers pay for products at the time of delivery rather than during online checkout. The carrier collects cash from the customer and remits it to the merchant through settlement cycles.
COD is dominant in markets with low banking penetration, limited credit-card access, or where consumers prefer to inspect products before paying. In Latin America 35-65% of e-commerce volume runs on COD depending on country.
For the merchant, COD trades online-payment risk for delivery risk: customers can refuse the order at the doorstep. The single largest profitability lever in COD is pre-dispatch confirmation — a hard gate that prevents bad orders from ever shipping.
Settlement cycles range from 7-30 days depending on the operator. Faster cycles preserve merchant cash flow.
Return to Origin (RTO)
Return to Origin (RTO) is the percentage of cash-on-delivery orders that never reach the customer or are refused at the doorstep — the package returns to the warehouse instead of being delivered. RTO is the single largest cost driver in COD e-commerce.
Hard-gated confirmation
Hard-gated confirmation is a COD operational policy where orders are not released to the warehouse for shipping until they have been confirmed by a risk-control call center. If the buyer cannot be reached after the retry SOP completes, the order does not ship.
Settlement cycle
A settlement cycle is the published cadence on which a COD platform transfers collected cash from its accounts to the merchant\'s bank account. Faster cycles preserve merchant cash flow; slower cycles indicate operator risk or weak finance ops.
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