Is Cash on Delivery (COD) available for international shipments?

In today's fiercely competitive online retail market, service providers employ various strategies to attract customers, from shipping and packaging to payment. One popular payment method in the domestic market is "COD," which provides buyers with confidence that the goods will arrive before payment. However, when it comes to international shipping, many may wonder if COD is still applicable, and what limitations or conditions they should be aware of. This article from SME Shipping will guide you through the essential details of "COD," or "Cash on Delivery."

What is cash on delivery (COD) service?

Cash on Delivery (COD) is a payment service that allows you to pay upon receiving the goods. It's ideal for customers who want peace of mind before paying. Customers pay the delivery person when they receive the package at their home or designated pickup point. After payment is completed, the shipping company will transfer the money back to the store or seller according to their established transfer schedule.

• C = Cash | O = On | D = Delivery
• COD (Cash on Delivery) - Payment is collected upon delivery of the goods.

The reason why COD (Cash on Delivery) is not usually used for international shipments.

Although cash-on-delivery (COD) services are very popular in domestic trade, as they build customer confidence and boost sales, they are rarely used or are severely limited when it comes to international shipping. This is due to security concerns, the complexity of international transactions, and the requirements of various international shipping companies, particularly regarding taxes, customs, and financial procedures that are significantly more complex than those for domestic sales.

1. There is a payment risk as the carrier cannot guarantee that the recipient overseas will pay.
2. Tax and customs complexities are involved; goods shipped internationally often have to pass through customs, making COD (Cash on Delivery) difficult.
3. Refunds to the seller in the country of origin can be time-consuming and involve high fees.
4. Most multinational shipping companies do not support COD (Cash on Delivery), such as FedEx, DHL, UPS, or Thailand Post (for international shipments); they generally do not offer COD service.

Recommended alternatives to COD for international sales.

1. Make a prepayment through a secure platform: such as PayPal, Stripe, Wise, or bank transfer.
2. Sell through global e-commerce platforms: such as Amazon, eBay, Etsy, and Shopee Global, which have systems to protect both buyers and sellers.
3. Use a payment gateway that supports multiple currencies: to build confidence with international customers.

Advantages of COD service

• Customers are confident that they will receive the goods before paying.
• Suitable for customers who do not have a credit/debit card or are unable to transfer money.

Disadvantages of COD service.

•  There is a risk that customers may refuse to accept the goods or fail to pay.
• Sellers may incur additional costs, such as COD (Cash on Delivery) fees.
• The money is being delayed because we have to wait for the transfer to be processed back.