Cash on delivery purchases: can it cost the customer more?

Cash on delivery has returned to the forefront of Italian e-commerce: more and more online stores are reintroducing it to cater to customers who are less accustomed to digital payments. But what does it mean to pay cash on delivery, how does it work, and — above all — can it cost more? This guide answers all the questions, including Antitrust regulations.

What does cash on delivery mean?

Cash on delivery is a payment method in which the customer pays the amount due directly to the courier at the time of delivery, rather than at the ordering stage. The term "cash on delivery" indicates that the goods are held by the shipper until the money is received: only after collecting the sum does the courier deliver the package.

Until a few years ago, this method had almost disappeared, supplanted by credit cards and PayPal. However, recently, many online retailers — especially in Italy — have reintroduced it to target a segment of buyers who are still wary of making advance payments online.

How does cash on delivery work?

The mechanism of online purchases with cash on delivery involves three parties:

• The seller, who ships the goods without receiving payment in advance.
• The courier, who delivers the package and collects the sum on behalf of the seller.
• The buyer, who pays only upon receiving the goods.

There are two methods of payment to the courier:

1. Cash: the most common form. The customer hands over the money to the courier at the time of delivery.
2. Credit card or payment app: some couriers are equipped with POS systems. This is still an uncommon solution, but it is present especially in home delivery services.

If payment is made by card, the seller receives the funds almost immediately. With cash on delivery, however, the courier must first collect the money from the buyer and then transfer it to the seller: this additional step is one of the main reasons for the extra costs associated with this method.

How much does cash on delivery cost?

The cost of cash on delivery is one of the most frequently asked questions by online shoppers. The answer depends on the seller and the courier used, but the underlying principle is always the same: the service of managing cash by the shipper has a cost, which in most cases is passed on to the buyer.

Cash on delivery fees come in two forms:

• Explicit commission: clearly indicated at checkout as a separate item (e.g., "cash on delivery fee: €3.90").
• Hidden cost: the final price is higher than the list price without the difference being clearly labeled. This practice is unfair and potentially sanctionable.

Even Poste Italiane applies surcharges for cash on delivery payments, with limits set at €1,030 for ordinary shipments and €999 for express packages. These limits are essentially fiscal in nature and do not represent a protection for the consumer.

Is the surcharge on cash on delivery legal?

This is the most delicate issue. The answer depends on how the cost is applied and communicated.

The European Directive 2011/83/EU on consumer rights, transposed in Italy in the Consumer Code, states in art. 62 that the seller cannot apply a surcharge for the use of a specific payment instrument that exceeds the actual costs incurred. In 2016, the AGCM (Antitrust) sanctioned Norwegian Airlines and Blue Air — respectively with €250,000 and €300,000 — for applying surcharges on payments other than credit cards, including bank transfers. In 2017, it sanctioned 5 energy distributors for the same reason.

The controversial point concerns cash on delivery: some jurists and economists argue that cash on delivery does not fall within the technical definition of "payment instrument" under the Directive, and therefore art. 62 of the Consumer Code is not applicable. The interpretative debate is still open.

In practice, this means that some operators may continue to apply surcharges for cash on delivery payments without incurring direct penalties, at least until a definitive ruling. The fairest solution, and one that the most transparent retailers are leaning towards, is to negotiate lower rates with couriers to absorb the cost without passing it on to the customer.

Buying cash on delivery: advantages and disadvantages

Websites where you can pay cash on delivery: how to find them

Not all online stores offer this method. To find websites where you can pay cash on delivery, the quickest way is to check the "Payment Methods" section or proceed to checkout: if cash on delivery is available, it will appear among the payment options before order confirmation.

Those managing an e-commerce on PrestaShop can enable the cash on delivery payment module directly from the back office, in the Modules section. The native PrestaShop module for cash on delivery allows you to configure the additional cost to be applied and to display it transparently to the customer during checkout.

Cash on delivery and online sales: what the seller must do

If you offer cash on delivery sales in your e-commerce, follow these best practices to stay compliant and maintain customer trust:

• Show the cost explicitly: highlight the surcharge as a separate item in the order summary, never as a silent price increase.
• Negotiate rates with the courier: competition among carriers is high — evaluate multiple quotes to reduce the service cost and offer cash on delivery under more competitive conditions.
• Update the general sales conditions: include a specific section that describes the methods, costs, and limits of cash on delivery payments.
• Monitor the regulations: the interpretation of art. 62 of the Consumer Code in relation to cash on delivery is still evolving.

Frequently asked questions about cash on delivery

What does "pay cash on delivery" mean?

It means paying the courier in cash (or sometimes by card) at the time of delivery of the package, rather than making the payment online at the time of ordering.

Can cash on delivery cost more?

Yes. Most couriers apply a surcharge for cash management, which many sellers pass on to the customer. The amount varies, but it must always be clearly indicated before order confirmation.

Is buying cash on delivery safe?

For the buyer, it is one of the safest methods, as payment is made only upon receipt of the goods. The main risk is not having the cash available at the time of delivery.

Do all couriers accept cash on delivery?

No. The service must be activated by the seller with their courier. Poste Italiane offers it with amount limits (€1,030 for ordinary shipments); other carriers have different policies.