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Cash on delivery means the recipient pays for the parcel when it arrives, instead of the sender paying up front. LetterAgent's Xpresspost labels do not offer cash on delivery, so you cannot add it to a label bought through LetterAgent. Here is how COD works in general, what it costs, and what to use instead.
With COD, the sender hands the parcel to the carrier without paying the full delivery charge, or pays only part of it, and the carrier collects the rest from the recipient at the door or at a pickup point. The amount collected usually covers the shipping charge, the price of the goods, or both, depending on how the sender set it up. The carrier then sends the money on to the sender, minus a handling fee for the service.
COD goes by different names depending on the carrier. Canada Post calls its version Collect on Delivery. In the United States, the major carriers offer similar collect services with their own rules and limits. The idea is the same everywhere: payment changes hands at delivery, not at drop-off.
Payment at the door is rarely literal cash these days. Many carriers accept debit, and some accept a cheque or money order, but policies vary by carrier and by delivery point. A recipient who expects to pay cash should confirm what the carrier accepts before the parcel is on its way, since a driver who cannot take the payment will not leave the parcel.
COD is not free. The carrier charges a fee for collecting the money and remitting it, and that fee usually comes out of the amount sent back to the sender. Some senders pass the fee on to the buyer by adding it to the COD amount; others absorb it as a cost of doing business. Either way, someone pays for the extra handling.
COD also puts a ceiling on the transaction. Carriers set maximum collect amounts, and a parcel worth more than that ceiling cannot go COD at all. There are also rules about which services COD can be added to: it is typically an add-on for parcel services, not for letter mail, and it is not offered on every shipping product.
| Option | Who pays up front | Who pays at delivery | What the sender gets back |
|---|---|---|---|
| Prepaid label | The sender | Nobody | Nothing: the sale is already settled |
| Cash on delivery | Usually nobody, or only part of the charge | The recipient | The collected amount, minus the carrier's COD fee |
| Invoice after delivery | Nobody | The recipient, later | Payment on the invoice terms, if the buyer pays |
This is the weak point of COD, and it is the reason many sellers avoid it. If the recipient is not home, does not have the payment ready, or simply changes their mind, the carrier does not leave the parcel. After a failed delivery attempt or two, the parcel comes back to the sender, and the sender usually pays the return postage. A seller who ships COD to an unreliable buyer can end up paying postage in both directions and still holding the item.
Some sellers reduce this risk by asking for a deposit before shipping, or by using COD only for repeat customers they trust. Others skip COD entirely and ask for payment before shipping, which removes the refusal problem at the cost of asking the buyer to trust the seller instead.
COD survives because it solves a trust problem from the buyer's side. A buyer who has never dealt with a seller before may not want to pay in advance for goods they have not seen. COD lets them inspect the parcel, or at least confirm it arrived, before handing over money. It is also useful where buyers do not have credit cards or online payment accounts, which is still common in some communities and for some kinds of trade.
Small classified-ad sales are a classic case: a buyer agrees to take an item, the seller ships it COD, and the buyer pays the courier. Repair shops and parts suppliers use it too, sending a part to a customer who pays on receipt rather than over the phone.
If you are sending within Canada and want a simple prepaid label, you can get a Canada Post Xpresspost shipping label by asking your AI assistant through LetterAgent: you approve the exact quoted price, make a one-time Stripe payment, and receive the label as a PDF. The label is Canada-only, flat-rate Xpresspost, and covers parcels up to 5 kg. It does not include a collect-on-delivery option, so the sender pays at the time of purchase.
For sellers who want buyer protection without COD, the usual alternatives are payment before shipping through an online payment service, a marketplace that holds the payment until delivery is confirmed, or an e-transfer sent before the parcel goes out. Each of these shifts the trust question around rather than removing it, so the right choice depends on which side of the deal needs more reassurance.
Ready to ship it? Get a shipping label with LetterAgent: describe it to your AI assistant, approve the exact quoted price, and get your label.
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