Cash on delivery means the customer pays the courier or rider in cash when the parcel arrives, not at checkout. In Pakistan it is still the default way to buy online, so every seller has to understand it, and every buyer eventually asks why it disappears from some orders.
This guide covers the cash on delivery meaning in Urdu and English, how the money actually moves, why the option is sometimes missing and what sellers can do about fake orders and refusals. If you only sell, skip to the section on stopping fake orders.
Cash on delivery meaning in Urdu and English
Cash on delivery (COD) means payment at the door. In Urdu it is written as “کیش آن ڈیلیوری” or described as “ڈیلیوری پر ادائیگی”, which simply means you pay when the order reaches you. Nothing is charged to your card or wallet beforehand.
It works in Pakistan because of trust. Many buyers have never paid a shop they can’t see, and many don’t own a card. COD takes that risk away from the buyer and hands it to the seller. Almost everything in this guide comes back to that one trade.
COD is also not a separate app. It is a payment option inside the store or delivery app you are already using, so if you search for a cash on delivery app, what you actually need is a store that offers the option at checkout.
How cash on delivery works step by step
- The buyer picks cash on delivery at checkout, or confirms the order on WhatsApp.
- The seller packs the parcel and books it with a courier such as TCS, Leopards, PostEx or M&P, entering the amount to collect.
- The rider delivers the parcel and collects the cash.
- The courier deducts its shipping fee, COD fee and withholding tax, then pays the rest to the seller’s bank account.
- If the buyer refuses, the parcel returns to the seller, who has already paid for the trip out and usually pays for the trip back too.
Step 4 is where new sellers get surprised. The courier is holding your money, and for how long depends on who you book with and on your account type. Retail, corporate and negotiated accounts can have different terms at the same courier, so a settlement period quoted in a blog or a friend’s story may not be yours.
Cash on delivery vs online payment
| Cash on delivery | Online payment (card, wallet, bank transfer) | |
|---|---|---|
| Buyer risk | Low, pays after seeing the parcel | Higher, pays before delivery |
| Seller risk | Refusals, fake orders, return shipping | Chargebacks and failed payments are rarer |
| Seller gets paid | After delivery, after the courier settles | Usually before dispatch |
| Withholding tax | Higher rate | Lower rate |
| Fits | Buyers who don’t trust or can’t use digital payments | Repeat customers and higher-value orders |
Neither is better for everyone. Most Pakistani sellers end up offering both and nudging buyers toward the one that costs less.
Why cash on delivery is not available on some orders
If you are a buyer and COD is greyed out, one of these is usually the reason.
- Order value is too high. Couriers cap COD by destination and stores add their own limits. Samsung Pakistan, for example, offers COD on mobiles and accessories only below Rs 500,000.
- The Rs 200,000 cash rule. FBR Circular 02 of 2025-26 (Income Tax) extended the Rs 200,000 cash transaction limit under Section 21(s) to e-commerce COD orders. It is a tax rule about deductible business expenses, not a ban, and traders have pushed back on it, so check its current status. Even so, it gives sellers a reason to steer bigger orders to bank transfer.
- Your area isn’t covered for COD. Remote towns are often excluded because the courier can’t collect and return cash reliably there.
- The seller turned it off. Many sellers switch COD off for certain products or cities after a run of refused parcels.
- Your number has a refusal history. Stores can decline COD for customers who rejected earlier parcels, and some say so in their terms.
- The store changed its rules. Marketplaces adjust COD by category and period, which is why people keep searching why cash on delivery is not available on Daraz.
If you hit this, try paying by bank transfer or wallet, delivering to an address in a bigger city, splitting the order, or messaging the seller on WhatsApp. Many will arrange an advance for the delivery charge and keep COD for the rest.
For Shein and Temu, availability has changed more than once and we could not confirm the current status, so check the payment step at checkout before you fill a cart.
How to use cash on delivery safely as a buyer
- Check the packaging and tamper strip before you pay the rider.
- Keep the exact amount ready. Riders often can’t give change.
- Don’t accept a parcel you didn’t order. Wrong-person deliveries are a known trick.
- Ask whether you can open the parcel before paying. It depends on the courier and the seller, so ask before ordering, not at the door.
- Check the return policy and ask how a refund would be paid. For COD orders it is usually a bank transfer or store credit, not cash.
- Save the order message and tracking number until the item is confirmed fine.
What cash on delivery really costs a seller
| Cost | What to expect |
|---|---|
| Courier COD fee | Rs 50 to 80 per order according to one payments company’s blog (Simpaisa). Treat it as a rough guide and use your own courier rate card. |
| Refused and returned parcels | The same source puts RTO (return to origin) at 25 to 30 percent of COD orders in Pakistan. That is one company’s claim, not independent data, so measure your own. |
| Cash delay | Varies by courier and account type, from upfront or 24 to 48 hours at some to a week or two at others. |
| Withholding tax | Couriers deduct income tax from your COD collections. For Tax Year 2027 (from July 1, 2026) the rate is 2% of the gross amount for sellers on the Active Taxpayer List and 4% for sellers who aren’t, against 1% and 2% on digital payments. Confirm the current rates with the FBR circular on couriers and e-commerce or your tax advisor. Our NTN registration guide explains why being on the list matters. |
| Your time | Reconciling cash, chasing couriers and re-calling customers. |
A refused order costs more than the courier charge. You also lose the packaging and the ad spend that produced the order. We worked through the refusal-rate break-even math in our dropshipping in Pakistan guide, so this post stays on prevention.
How to compare couriers for cash on delivery
Don’t pick a courier by brand name. Pick by settlement terms and by what happens to a failed delivery. What the couriers say publicly:
| Courier | Public information | Ask before you sign |
|---|---|---|
| PostEx | Advertises upfront COD payment | Fees, and whether upfront applies to your volume |
| City Courier | States 24 to 48 hour cash remittance and up to three delivery attempts in 72 hours | Return charges and fuel surcharges in writing |
| Oshi | States 48 hour COD settlement | The platform fee on top of shipping |
| Leopards | COD Retail needs no COD or corporate account, booked at Retail Express centers, paid to your bank after delivery | Settlement schedule on a corporate account |
| Pakistan Post | UMS-COD tariff slabs go up to Rs 100,000 per article, listed on its tariff circular | Doorstep collection limit (reported as Rs 50,000) and payout route |
| TCS, M&P, Trax | No fixed public COD terms we could verify | Payout schedule, return charges, attempt policy, account requirements |
These come from each courier’s own pages or tariff documents at the time of writing. Where a row says to ask, get the answer in writing, because terms change by account and volume. Compare by city for a month before committing, as covered below. Pakistan Post’s slabs are in its UMS-COD tariff circular.
How to stop fake orders and refusals
Most advice on this stops at “verify your orders”. That is right but too thin. Here is a system a small team can run without extra software.
1. Confirm every order before it ships. Send a WhatsApp message with the item, total and address and ask for a “YES”. No reply in 24 hours means the order waits. Brands like dcode and Zara Shahjahan state on their policy pages that COD orders are verified by phone before dispatch, so customers already expect it.
2. Decide which orders need an advance. Write one simple rule, for example: first-time customer plus high value or far city means delivery charges are paid upfront by bank transfer or wallet. A buyer who has already paid something has a reason to accept the parcel.
3. Keep a refuser list. A sheet with phone number, address, date and the courier’s remark is enough. Match on phone number and address, not name, because the same person returns with a new name. Check every new order against it.
4. Compare couriers by city, not by brand. For a month, log refusals and delivery time per courier per city. A missed first attempt is often what turns into a “refusal”, so ask every courier what their attempt policy is.
5. Fix checkout mistakes. Unexpected charges at the door cause refusals, so show the delivery charge before the order is placed. Validate the phone number format (11 digits starting with 03), use a city dropdown and separate house and street fields. Junk orders mostly come from forms that accept anything.
6. Read refusals by source. Tag each order with its campaign or channel. If one ad set produces double the refusals of another, the problem is the audience or the offer, not the courier.
Cash on delivery seller checklist
Run this before every cash on delivery dispatch.
- Order confirmed on WhatsApp
- Phone number checked and valid
- Full address and city confirmed
- Delivery charges told to the customer
- Phone number and address checked against the refuser list
- Advance collected if the order is high risk
- Tracking number sent to the customer
When cash on delivery only stops making sense
COD isn’t going away, but COD-only usually becomes a ceiling. Offer a small discount for prepaid orders, set up a payment gateway for customers who want to pay online and keep COD for the rest.
Sellers who take orders through DMs and spreadsheets lose the most here, because every confirmation is manual. A store with a proper order form, address validation and an automatic WhatsApp confirmation catches most junk orders before a courier is booked. That is the kind of web development work we do for Pakistani sellers. If you are choosing a platform, our Shopify Pakistan cost breakdown covers what it actually costs. If you sell on a marketplace, COD settlement and fees work differently, which we cover in the Daraz commission rate guide.
Cash on delivery FAQs
Q1. What is cash on delivery?
It is a payment method where you pay the courier in cash when your order arrives instead of paying online at checkout.
Q2. What is the difference between cash on delivery and prepaid delivery?
With prepaid you pay before the parcel ships, by card, wallet or bank transfer. With cash on delivery you pay at the door. For sellers, prepaid means no refusal risk and a lower withholding tax rate.
Q3. What are the advantages of cash on delivery?
For buyers, you see the parcel before paying and you don’t need a card. For sellers, it lifts conversions from customers who don’t trust online payment. The cost is refusals, delayed payouts and a higher tax rate.
Q4. Which online stores in Pakistan offer cash on delivery?
Most local stores, including marketplaces like Daraz, clothing brands such as dcode and Zara Shahjahan, and brands like Samsung Pakistan. Terms differ, so read the payment step at checkout.
Q5. Why is cash on delivery not available on Daraz?
Usually because of order value limits, courier coverage in your area, category rules or a refusal history on your account. Try a different address or payment method, or contact the seller.
Q6. Can I pay cash on delivery for any order?
No. The store, the product and your delivery location all have to allow it.
Q7. How does cash on delivery work with TCS?
Sellers open a COD account with TCS. The rider collects cash at the door and TCS sends the amount to the seller after delivery, minus its charges and withholding tax. Rates depend on your volume and order values, so ask TCS for current terms.
Q8. Do I need a cash on delivery account to sell online?
You need one with each courier you book COD through, though Leopards runs a retail COD service that doesn’t require one. Requirements vary, but expect to provide business details and a bank account for payouts. Ask the courier for its current list.
Q9. Do online sellers need an NTN for COD in Pakistan?
Under the current e-commerce tax rules, sellers who are not on the Active Taxpayer List pay double the withholding rate on COD collections (4% instead of 2%), so having an NTN and being on the list lowers your deduction. Read our NTN guide for the steps.
Q10. Does the seller receive COD money immediately?
Not usually. The courier collects the cash and pays the seller after delivery, on its own schedule. Some couriers pay upfront or within 48 hours, others take longer.
Q11. What happens if a customer refuses a COD parcel?
The parcel goes back to the seller. The seller typically pays the outbound and return shipping, and the order is cancelled.
Q12. Can a seller charge an advance delivery fee for COD?
Yes, if the store’s policy says so up front. Many sellers ask for delivery charges in advance on high-risk orders. Show it before the order is placed so it doesn’t look like a surprise.
Q13. How do I set up cash on delivery for a small online business?
Enable COD in your store settings, open a COD account with a courier, set which cities and order values allow it, and add an order confirmation step before dispatch.
Q14. Are there extra charges for cash on delivery?
Couriers charge sellers a COD fee. Some stores pass a COD handling fee to the buyer, which should show before you confirm the order.
Q15. Can I return a cash on delivery order?
Usually yes, under the seller’s return policy. Paying cash doesn’t remove your return rights, but the refund is handled manually, so ask how it will be paid.
Q16. How do I track a cash on delivery order?
Use the tracking number from the seller or courier on the courier’s website or app. If you didn’t get one, message the seller.
Q17. What is the maximum order value for cash on delivery?
There is no single national courier limit. Each courier and store sets its own. On the tax side, the FBR’s Rs 200,000 cash limit under Section 21(s) was extended to e-commerce COD orders in 2025. Pakistan Post’s UMS-COD slabs go up to Rs 100,000 per article.
Q18. Is cash on delivery available through Pakistan Post?
Yes, cash on delivery runs through its UMS-COD service, which collects the amount on delivery and remits it to the sender through the postal money order system.
Q19. Can I pay with a mobile wallet on cash on delivery?
Standard COD is cash. Whether a rider accepts a wallet transfer at the door depends on the courier and store, so don’t count on it.
Q20. Is cash on delivery risky in rural areas?
For sellers, yes. Coverage is thinner, delivery takes longer and refusals are harder to resolve, so many require an advance there. For buyers, the risk is mostly delay.
Q21. Where can I find cash on delivery near me?
Mostly local restaurants and shops that deliver. Check the store’s page or app, or call and ask before ordering.
