Customers buy time with Collect on Delivery (C.O.D.) Service. They don’t have to put their wants and wishes completely on hold if they are temporarily strapped for money. C.O.D., often called cash on delivery, buys the time to scrounge up dollars and cents while the package winds its way through the mail.
For the seller, C.O.D. means they do not have to extend credit to customers. Indeed, COD gives sellers the assurance they will receive full payment for the items with the post office acting as the financial middleman.
The service started on July 1, 1913, six months after Parcel Post Service began. Reportedly, this lag time was to allow postal employees and mailers time to get accustomed to the Parcel Post Service. C.O.D. certainly added a substantial number of steps and regulations, but was seen as a real benefit to the proliferating mail order business in the country. In 1913 the fee for C.O.D. was 10 cents, which included a collection amount up to $100 and carried insurance against the loss of the value of the goods, not to exceed $50. The shipper could charge the cost of this fee and postage to the addressee. The recipient had to bear the cost of the money order fee; not until 1987 were checks also accepted for payment.
Shortly after its introduction, some people found ways to try to cheat the system. The Post Office Department’s Annual Report of 1914 described such C.O.D. abuse and fraud: “It is not permissible to send, in a ‘dummy’ or ‘fake’ package containing no fourth-class matter, a bill, whether receipted or not, for the purpose of having the service collect a former debt, and the practice of sending C.O.D. articles to persons who have not ordered them is discountenanced.” As of 2013, such collection agency use is still prohibited and the requirement still stands that the goods have to have been ordered by the addressee. Application of the service has expanded over the century to include higher value collection amounts ($1000 as of 2013) as well as third, first, and express mail classes, and to permit more allowances to change the order’s indemnity and addressee information during shipment.
“C.O.D. Parcel Post Next.” New York Times. Feb. 28, 1913. Page 6.
United States Post Office Department. Annual Report of the Postmaster General for the Fiscal Year ended June 30 1914. Washington, DC: United States Government Printing Office, 1914.
United States Post Office Department. United States Official Postal Guide July 1913. Albany, NY: J.B. Lyon Company, 1913.
Wawrkiewicz, Anthony. “Change of Terms of C.O.D. Service.” United States Specialist. 69:10, Pages 457-59.
Written by Lynn Heidelbaugh