Cash on Delivery

by Investing School on September 2, 2009

When goods or services are delivered, the entity making such a delivery sometimes agrees to an arrangement known as cash on delivery, which entails that payment be made in cash. Usually this arrangement is necessary when the entity purchasing the goods or services has a poor credit record or checks have bounced. Some companies with limited capital insist on cash payment, and there are those that will not do business unless cash payment is made.

When cash is the only method of payment accepted, the entity purchasing goods should insist on a receipt or some assurance that, if the goods purchased are of substandard quality or need to be returned for any reason within an agreed upon time frame, a refund or replacement policy is in place.

Anyone purchasing goods or services where a cash only policy is in place should be cautious about such an arrangement. Companies selling black market goods insist on cash payment.

Almost all government services must be paid in cash. Often legal documents are not given out until there is a cash payment.

Some restaurants and clubs do not accept credit cards or checks. Even some neighborhood convenience stores insist on cash payment.

In today’s world where nearly everyone pays with plastic, a cash on delivery policy can wreak havoc, especially where large transactions are involved. Unless the goods or services being offered are a necessity or are not readily available at another convenient location, the consumer will opt for the seller that does not demand a cash transaction.

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