CASH ON DELIVERY. The cash on delivery service, pop ularly known as C.O.D., is designed principally to provide a means of ordering goods and securing delivery through an agent against payment in cash instead of on credit or prepayment. In most countries the system is a feature of the postal organization, but the facility may also be provided by private agencies or even by joint arrangement between a post office and a private agency. To the trader the system offers a ready means of supplying distant customers without risk of loss. To the customer the system offers equal attractions, not merely by providing with the mini mum of trouble for the prompt delivery of, and the payment for, goods that may be ordered by post or otherwise, but by eliminating any risk involved in payment before receipt of the goods. Its essential merit is that it gives to both seller and buyer access to wider markets at a minimum cost : in conjunction with advertising it becomes a distinctive method of retail trade.
It might be thought that the system would offer particular advantages to residents in rural and sparsely populated areas and would therefore prove most popular in countries of wide territory, but experience has shown that the service is no less attractive in town and urban districts. The most striking development of the service has taken place in the United States where more than 51 million domestic cash on delivery parcels were dealt with by the post office in 1926. This, however, is not so much due to the extent of the territory as to the growth in the U.S.A. of the mail-order business and the establishment in 1913 of the postal cash on delivery service.
In nearly every European country, and in many countries out side Europe, a cash on delivery service has been in operation for many years. As long ago as 1849 the Swiss post office instituted an internal service and three years later it was made the subject of a postal arrangement with Austria and with certain German Principalities. But it was not until the Postal Congress held at Lisbon in 1885 that regulations were laid down for the exchange between postal administrations of cash on delivery parcels and regulations for a similar exchange by letter post were added at the Postal Congress of Vienna in 1891. The extension of the system to the letter post, first in internal services and later in interna tional postal relations, has enormously widened the scope of the scheme by providing for the collection and remittance of the value of articles that may be sent by letter post or for the collec tion and remittance of charges on goods consigned by rail or otherwise.
The service, under the name of "Value payable," was intro duced by the post office of India in 1877 and over 12 million articles of the total value of 28 crore of rupees were dealt with in 1926. In Australia the system was established also in and in 1922 and 1925 the arrangement was introduced by the post offices of Canada and South Africa, respectively, although a sys tem of postal drafts presenting some features of the cash on de livery scheme was in operation in South Africa considerably earlier.
The delay in the adoption of the cash on delivery service in the United Kingdom was due, not to the opposition of the British post office, but rather to the hostility of retail trading interests. Owing to this hostility a proposal in 1904 to introduce a cash on delivery service as part of the inland parcel post had to be aban doned, but negotiations subsequently opened resulted in the estab lishment of the system between the post office of the United King dom and Cyprus, Egypt, Malta and certain British postal agen cies abroad. A wide extension of the arrangement soon followed and the post offices of India, New Zealand and most British colo nies and protectorates entered the scheme. In the relations be tween the British and various foreign post offices the arrangement was introduced generally in 1919 and 192o and the service is now in operation between the United Kingdom and many European countries as well as with China.
Owing to the striking development of the service abroad and to the fact that experience had shown that the apprehensions of small retail traders were groundless it was eventually decided to introduce the scheme in the United Kingdom. An inland cash on delivery service, limited as in the case of the numerous external services to the parcel post, was accordingly instituted in March 1926. It proved an instant success and the continuous increase of the traffic, which at the end of 1927 was at the rate of nearly two million parcels a year, is evidence of its growing popularity. The scheme has proved particularly attractive to motor and general engineers for the transmission of motor and machine parts, and drapers and outfitters also make considerable use of it.
The maximum amount that may be collected under the arrange ment is fixed in the United Kingdom and generally by the post offices of other countries at the limit for money orders, settlement with the sender being effected by means of a special order. For the services of collection and remittance a fee is charged on an ad valorem scale, in addition to the postage. As against this, the vendor saves the cost of collection and the purchaser that of re mittance. The British service has been found to pay its way on the existing scale of fees.
In April 1928 the British inland cash on delivery service was extended to packets sent by registered letter post as well as to consignments sent by rail to any part of Great Britain. In each case the limit of value is the same as that applicable to inland cash on delivery parcels, viz., £40, and payment is effected by means of a special order.
The service by rail is conducted jointly by the British post office and the four main British railway groups, the latter undertaking conveyance and the former being responsible for the collection from the consignee of the amount due and for the transfer of this sum to the sender. The essential feature of the scheme is that the sender, having consigned his goods by rail, forwards to the consignee in a cash on delivery letter which is handed to him on payment of the amount due, a document enabling him to obtain delivery of the goods from the railway company.
The cash on delivery registered letter post is intended to pro vide facilities for the despatch of small articles which are more appropriate to the letter than to the parcel post. In the case of the railway service there is prac tically no weight restriction. The scheme is particularly suitable for consignments too heavy or too bulky for the parcel post as well as for garden and dairy pro duce for which the parcel limit of 11 lb. may be inadequate.