Get Paid on Delivery: How USPS COD Works

Last updated 8 months ago ago. Our resources are updated regularly but please keep in mind that links, programs, policies, and contact information do change.

The United States Postal Service (USPS) offers a service known as Collect on Delivery (COD), which provides a mechanism for senders to receive payment for their merchandise, postage, and fees at the time of delivery to the recipient.

This service flips the normal e-commerce transaction flow where payment typically comes before the shipment of goods.

Benefits of COD

For senders, COD opens opportunities to reach customers who may not have or prefer not to use credit cards or online payment methods. It also introduces a layer of trust, particularly for new businesses or individual sellers, by allowing the recipient to pay only upon receiving the item.

Recipients benefit from the ability to inspect the goods (in some instances) and remit payment at the point of delivery, offering a degree of security and convenience.

The USPS acts as an intermediary in this process, collecting the designated payment from the recipient and subsequently forwarding it to the sender. The maximum value that can be collected for a single COD item is capped at $1,000. For transactions involving higher-value goods, senders will need to explore alternative payment and shipping strategies.

How to Use USPS COD as a Sender

Initiating a COD shipment involves several key steps:

1. Verify that the chosen mail class and the destination are eligible for COD service. Not all USPS mail classes support this option.
2. Obtain and accurately complete PS Form 3816. This form requires detailed information including the names and addresses of both the sender and the recipient, the exact amount to be collected, and the unique article number of the shipment.
3. Securely affix the completed Form 3816 to the exterior of the package in a clearly visible location. This ensures that USPS personnel and the recipient can easily identify it as a COD shipment.
4. Pay the applicable postage along with the COD service fees at the time of mailing.
5. Present the COD package in person to a postal employee at a Post Office facility or give it to a rural carrier. COD packages cannot be simply dropped into a mailbox.
6. Receive a mailing receipt, which serves as crucial documentation for tracking the shipment and for any potential claims.

COD Service Fees and Costs

The COD fee is calculated based on whichever is higher: the specific amount to be collected from the recipient or the desired amount of insurance coverage for the item. This means senders need to consider both the payment they expect and the value of the goods being shipped.

The actual fee amounts are structured in tiers that depend on the value range. For instance:

• A package requiring collection or insurance up to $50 might incur a fee of $5.25
• A value between $900.01 and $1,000 could have a fee of $17.25

Beyond the basic COD fee, there are additional charges for supplementary services such as restricted delivery or for a notice of non-delivery.

It’s important to note that the COD fee itself is non-refundable, even if the package is ultimately refused or undeliverable. Furthermore, if the recipient chooses to pay in cash, a money order fee will be added to the total amount they pay.

Eligible Mail Classes

USPS COD service is available for a variety of domestic mail classes:

• Priority Mail Express (for 1-Day and 2-Day service only)
• Priority Mail
• First-Class Mail
• USPS Ground Advantage (for both retail and commercial customers)
• Media Mail
• Library Mail
• Bound Printed Matter
• Parcel Select

This wide range of eligible mail classes allows senders to choose a shipping method that aligns with the nature and urgency of their shipment while still utilizing the COD payment option.

Combining COD with Other USPS Services

COD can be combined with other USPS services for added security and convenience:

• For extra security, COD can be combined with Registered Mail for First-Class Mail or Priority Mail items.
• For delivery confirmation, COD or COD Restricted Delivery can be paired with Return Receipt (available in hardcopy or electronic format) and Signature Confirmation (though this combination is not available with Priority Mail Express COD).
• For recipient convenience, COD can be combined with the Hold for Pickup service.

Payment Collection and Remittance

Upon delivery, the recipient has several payment options:

• Cash
• Pin-based debit card
• Personal check
• Money order

All checks or money orders must be made payable directly to the sender. Senders cannot specify a particular payment method; the choice rests with the recipient.

After the recipient makes the payment, the USPS forwards the funds to the sender:

• If the recipient pays with a check or money order, the USPS will mail that payment directly to the sender.
• If the payment is made in cash, the USPS will typically issue a money order for the collected amount and send that to the sender, after deducting the applicable money order fee.

For senders who prefer a more direct method of receiving payments, especially businesses with regular COD transactions, the USPS offers Electronic Funds Transfer (EFT). This allows the collected funds to be directly deposited into the sender’s designated bank account, particularly when the delivery occurs from a Post Office location equipped with Retail System Software.

Unless the sender utilizes EFT, the standard method for remittance is via First-Class Mail. In the event of significant delays in receiving payment (exceeding 60 days for domestic mailings), senders can report this issue to the USPS for investigation.

The Recipient Experience

For recipients expecting a USPS COD package, the delivery process has specific characteristics:

1. If the recipient is not at the specified address during delivery, a notification will be left indicating that a COD package is being held at their local Post Office.
2. To claim the package, the recipient must visit the Post Office and present a valid primary photo identification, such as a driver’s license or passport.
3. Payment is required at the time of receiving the package; the recipient cannot take possession of the item without first remitting the full amount due.
4. Recipients can pay using cash, a pin-based debit card, a personal check, or a money order.
5. If the recipient pays with cash, the USPS will include a money order fee in the total amount collected.
6. When paying with a personal check or money order, these must be made out directly to the sender as indicated on the COD form.
7. For a single COD package, only one form of payment is permissible; recipients cannot combine different payment methods.

If a recipient misses the initial delivery attempt, the COD package will be held at the Post Office for up to 10 days, unless the sender has specified a shorter holding time. If the package remains unclaimed within this holding period, or if the recipient explicitly refuses to pay, the item will be returned to the original sender. The sender will be responsible for any return postage costs.

Advantages of USPS COD

For Senders:

• Reaches customers who might not have credit cards or prefer not to use them
• Builds trust with new customers, as they only pay when they receive the merchandise
• Reduces the risk of non-payment in business-to-business transactions
• Leads to faster payment and improved cash flow compared to invoicing
• Includes insurance coverage up to $1,000

For Recipients:

• Pay for items only upon arrival
• Possible brief inspection of the package before payment (though not an official policy)
• Convenient option for individuals without credit cards or online payment methods
• Reduces the risk of online scams
• Flexible payment options (cash, check, debit card)

Limitations and Restrictions

Despite its benefits, USPS COD has certain limitations:

• Maximum collectible amount of $1,000
• Maximum indemnity for loss or damage typically capped at $1,000
• Not available for international shipments, APO/FPO/DPO addresses, or certain Freely Associated States
• Cannot be used for collection agency purposes
• Cannot be used for the return of unsatisfactory merchandise unless specifically agreed upon
• Cannot be used for mailing only bills or statements of account
• Items must have been explicitly ordered by the recipient; unsolicited items cannot be sent COD
• Not typically intended for merchandise returns under standard circumstances
• COD mail must be presented at a Post Office or to a rural carrier
• No guaranteed delivery time, except when combined with Priority Mail Express

Common Questions and Concerns

While generally reliable, some users have reported occasional issues with USPS COD:

• If a recipient is not home during delivery, a notice will be left, and the package will be held at the Post Office.
• Officially, recipients are not allowed to inspect the package before paying, although some delivery personnel might permit a quick visual check.
• If a recipient’s check bounces, the USPS’s liability is limited, and the sender might need to pursue legal action.
• Claims for loss or damage can be filed online or at a Post Office, with specific timeframes and documentation requirements.
• USPS Delivery Instructions cannot be used with COD shipments.

Preparing a COD Package

Preparing a package for USPS COD requires careful attention to detail:

1. Obtain PS Form 3816 from a Post Office or order it online.
2. Complete all required fields on the form in ink, including sender and recipient information, the COD amount, and the delivery type.
3. Securely attach the form to the package in a visible location.
4. For multiple COD items, consider using PS Form 3877 (firm sheet) in duplicate.
5. Ensure the package has complete and accurate addresses for both sender and recipient.
6. Verify that the return address on the COD form matches the package.
7. Take the COD package to a physical Post Office or give it to a rural carrier.
8. Pay the applicable postage and COD service fees at the time of mailing.

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