A more thorough explanation:

Definition: C.O.D. stands for "Cash on delivery" or "collect on delivery." When a buyer agrees to this delivery term, they agree to pay for their purchase at the same time it is delivered to them. The carrier (the company delivering the item) acts as the buyer's agent to receive and transmit the payment to the seller. With C.O.D. contracts, the carrier usually does not allow the buyer to inspect the item before payment.

There are a few different meanings for C.O.D.:

1. Cash on delivery; collect on delivery. By consenting to this delivery term, the buyer agrees to pay simultaneously with delivery and appoints the carrier as the buyer's agent to receive and transmit the payment to the seller. With C.O.D. contracts, the practice of carriers has traditionally been to disallow inspection before payment.
2. Costs on delivery.
3. Cash on demand.

Example: If you order a new couch and choose C.O.D. as your delivery option, the delivery person will bring the couch to your house and collect payment from you at the same time. You won't be able to inspect the couch before paying for it.

Example: A small business owner might use C.O.D. as a way to ensure they get paid for their products. They can ship their products to customers and require payment upon delivery, so they don't have to worry about customers not paying them.

These examples illustrate how C.O.D. works and how it can be used in different situations.