Cash on delivery

What it means

Cash on delivery is a payment method in which the customer pays the courier or post office on receiving the parcel, in cash or by card. It remains popular in Slovakia, especially with cautious customers and on a first purchase from an unfamiliar online store, since nothing is paid in advance.

For the shop, however, it brings costs and risks. The carrier charges a COD fee, some parcels are never collected and the shop pays shipping both ways, and the carrier passes the money on with a delay, which hurts cash flow.

Alternatives include prepayment through a payment gateway, instant bank transfers or buy-now-pay-later services. Online shops often keep cash on delivery but favour online payment with cheaper shipping or by listing it first.

How it works in practice

For sales recording purposes, cash on delivery counts as a cash payment. The online shop must therefore issue a receipt from eKasa and include it in the parcel, which needs to be set up in the link between the shop and its till system.

In the accounts, a receivable from the customer arises on dispatch and turns into cash once the carrier pays out. Carriers usually send one payment for many parcels minus fees, so carrier statements must be matched to individual orders.

For uncollected parcels the shop may claim shipping costs from the customer if its terms allow, but chasing small sums rarely pays. Order confirmations, a text before delivery and the option to collect from a pick-up point on the last mile help.

What to watch out for

A customer who paid cash on delivery has the same right to withdraw from the contract within 14 days as one who paid in advance. The money must be refunded by bank transfer, and the trader cannot keep the COD fee if it formed part of the cheapest delivery option.

For high-value parcels and large cash sums, remember the cash payment limit and courier safety. Many carriers therefore cap COD at a certain amount, and for expensive goods it is better to require payment in advance.