Delivery First 📦
Why the C.O.D. model became popular in the time before the credit card—and why many countries have yet to give up on it.
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Odds are, if you’re reading this, and you’re based in the U.S., you probably do not remember the term C.O.D. beyond one specific context—TV commercials that loudly announced that they didn’t accept it at the end of the commercial.
In many ways, C.O.D. was no longer necessary in most contexts beyond, say, ordering a pizza for delivery, but there was once a time when C.O.D. was an essential element of mail-order businesses. It was basically the tool that mail-order firms used to prove that they were trustworthy.
For example, the delivery business Montgomery Ward starting using it in the 1870s as a way to prove that the products they were delivering were of high quality, and you weren’t just getting delivered junk through the mail. (There are people who use Amazon and eBay today who would kill for a service like that.)
Companies that shipped large goods were first to the C.O.D. model, but it gained broad popularity after a single Illinois man, Harry H. Charles, pointed out that the variable-cost C.O.D. product he sold would be best sent through the U.S. Postal Service, rather than through other, less trustworthy means.
Charles’ argument was enough to get C.O.D. deliveries to take off nationally, with money orders the preferred way to pay for said cash-on-delivery orders.
Of course, as known by anyone who has ever received a pizza they didn’t order, the C.O.D. model is ripe for abuse—one could imagine people buying records that people didn’t want from the TV and then shipping them through the mail where they would be refused. So when credit cards finally took off in a mainstream way starting in the 1980s, it was clear that the era of the C.O.D. was on its last legs … at least in the U.S.
Outside of America, though, it’s a different story, especially in parts of Southeast Asia, Africa, and the Middle East, where companies like Flipkart have found success with combining the C.O.D. model with e-commerce. In many ways, it reflects a cultural difference that still matters today. Handing your cash, or at least your payment for goods at the time of receipt, feels personal, and it gives you a chance to confirm you actually got what you ordered.
It makes sense that the U.S. moved away from C.O.D., but it also makes sense why other countries haven’t given up on it quite yet.
» Wanna learn more? Check out our 2020 piece, “The Payment Comes After.” Also worth reading: Our 2015 piece on credit cards.