GlossaryEN1 min readUpdated: Jun 22, 2026

Collection (C.O.D.)

Unlike prepayment or a letter of credit, cash on delivery (C.O.D.) ties payment to the physical handover of goods: the consignee settles only once the shipment arrives.

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Last updated: 22 June 2026Published: 19 June 2025

Source: https://wirtschaftslexikon.gabler.de/definition/inkasso-43735

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Logistics Concept

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Definition & Explanation

Unlike prepayment or a letter of credit, cash on delivery (C.O.D.) ties payment to the physical handover of goods: the consignee settles only once the shipment arrives. The carrier or freight forwarder collects the amount on behalf of the shipper and remits it after deducting the collection fee, typically within agreed settlement cycles. C.O.D. is common in e-commerce, mail order, and markets where buyer-seller trust has not yet been established. The shipper retains control of the goods until payment is received but faces a return risk if the consignee refuses delivery. Handling fees and remittance timelines make C.O.D. more expensive and slower than upfront payment, extending the cash conversion cycle.

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Collection (C.O.D.)

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