There is one potential downside to shipping COD which is present every time an order is shipped in this matter. This of course, is the potential that the package could be refused by the customer. Most ltl carries with experience in shipping COD will tell you that this doesn't happen all that often, but it is still a reality that clients of these shipping companies must contend with.
It is important to realize that this legal right is there for a reason. There were simply too many people that would try to swindle honest customers in the early days of shipping such as through mail order shipments. The lessons learned are why that all customers have the right to refuse a COD shipment. However, many are finding as this method of shipping experiences a bit of a comeback that as long as you are dealing with your customers in an up front and honest way, and shipping a product as described, the refusal rate should be very low.
Usually, people order something that they want, or need. These wants and needs very rarely change in the amount of time that it takes for the product to be shipped to them, so, typically you won't have to worry about too many refusals. If a package is refused though, there are some costs which you are going to be responsible for.
When a package is refused on delivery, the cost of shipping the package to the customer, and the cost of shipping the package back to your facility are going to come to you. That is why COD service is usually only offered by courier services to clients that have long standing accounts with them. They need you to realize that you are going to be billed for the shipping one way or another should the shipment be refused.
Despite the fact that you may at times experience this unplanned expense to cover the shipping of a refused COD delivery, there is a lot to gain by shipping in this method. When a company is growing or starting out, one of the hardest battles they have to fight is getting people to trust in their brand. One way that they can accomplish this is by extending trust first to the customers, such as by shipping COD. Conventional business knowledge tells us that one of the best ways to receive trust is to first extend it, which actually makes COD shipping a viable marketing strategy.
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