How cash on delivery actually runs, step by step.
Confirmation before dispatch, custody on the road, what happens when an attempt fails, how returns come back in, and the daily reconciliation that lets you trace a payout line back to a single parcel.
The short version
Cash on delivery is not a payment method bolted onto delivery — it is an operating discipline. Four controls decide whether it makes money: nothing is dispatched before the buyer confirms it, every attempt is capped and logged with a reason, every returned parcel is inspected before it re-enters stock, and cash is reconciled daily against the order list rather than against a rider's day total.
From order received to cash reconciled
The same six stages run in every market. What changes by market is the payment methods accepted, the attempt allowance and the settlement cycle.
- 1
Order received
The order lands with the stock that is already in the warehouse, with the COD amount and the destination recorded against it.
- 2
Confirmation
The buyer is contacted before anything is picked. Address, item and the cash amount payable at the door are all confirmed.
- 3
Pick, pack, release
Only confirmed orders are released to picking. Packing is checked against the order line so the parcel and the COD amount match.
- 4
Dispatch and attempt
The parcel moves onto a door delivery run or to a collection point, and custody of the cash sits with whoever holds the parcel.
- 5
Cash captured
Payment is taken at handover — cash or the local mobile money method agreed for that market — and recorded against the order.
- 6
Reconciliation
Collected value is reconciled daily against the order list, so every payout line traces back to a specific parcel.
Failed attempts and what happens next
Most of the money in a COD operation is won or lost here. Every outcome below is recorded against the order, with a reason you can read.
| Situation | What happens |
|---|---|
| Buyer unreachable at confirmation | The order is not released. Repeat contact attempts are made over an agreed window; if there is still no answer the order is parked rather than dispatched, so you do not pay to move a parcel nobody agreed to. |
| First delivery attempt fails | The rider records the reason — no answer, wrong address, buyer not on site, cash not ready. The parcel stays in custody and a further attempt is scheduled within the agreed attempt allowance for that route. |
| Buyer asks to reschedule | The attempt is re-dated to the day and window the buyer gives, within the attempt allowance. Repeated rescheduling past that allowance is treated as a refusal. |
| Buyer refuses at the door | No cash is taken. The refusal reason is recorded and the parcel enters returns intake on the next inbound leg. |
| Attempts exhausted | The parcel is returned to the warehouse, inspected and put back into your sellable stock where its condition allows. Delivery and returns handling are chargeable even though no COD was collected. |
| Cash short at handover | Partial payment is not accepted against a full COD order. The parcel is not released and the exception is logged for your review before the next attempt. |
Attempt allowances and returns terms are confirmed per route in your service schedule. See the COD service terms for the standing commitments.
What good reconciliation looks like
- Every dispatched order carries the COD amount you set, not an amount the rider negotiates.
- Collected cash is banked and recorded against the order reference on the day it is captured.
- A daily collected-versus-dispatched view shows what was collected, what is still out on attempt, and what came back.
- Payout runs on the agreed settlement cycle for the market, in that market's currency.
- A payout line can be opened back to the parcel, the attempt and the person who took the money.
- Disputes are raised against the order reference, not against a payout total.
Where COD leaks margin
- Releasing unconfirmed orders and paying delivery cost on parcels nobody agreed to buy.
- No cap on delivery attempts, so a single order absorbs three or four paid runs.
- Cash recorded per rider or per day rather than per order, so a shortfall cannot be traced.
- Returns arriving with no inspection step, so damaged goods re-enter sellable stock.
- Reconciling weekly instead of daily, which means a discrepancy is found long after the trail has gone cold.
COD terms are confirmed market by market
Settlement currency, accepted payment methods and attempt allowances differ by country. Open the market you sell into.
Cash on delivery: common questions
Confirmation, attempts, custody and settlement.
Model COD against your own volume before you request a quote.
The cost estimator on the resources hub lets you weigh delivery, COD collection and returns against the orders you actually ship.