Can I Insure Cash Deliveries?

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If you've ever sold anything online and the person you're selling to wants to pay cash, you've probably found yourself wondering, "Can I insure cash deliveries?" Ultimately, the answer depends upon which shipping service you choose.

What Is COD?

Many people refer to COD as a cash-on-delivery, or cash deliver, but it actually stands for "Collect On Delivery." What this means is that the person shipping the item places the shipping company in charge of collecting payment for the item. When the item arrives at the recipient's location, the receiver is expected to either pay for the item with cash or a check. If payment isn't made at that time, then the mail handler doesn't leave the package with the recipient.

COD is just another form of payment available for when a customer either doesn't have a credit card to use or prefers receiving the item before making payment. Many companies offer COD as a way to entice additional customers who may prefer the security of having an item in-hand before paying for it.

The Dangers of Cash on Delivery

While COD seems like a very enticing option for sellers because they are guaranteed to receive their payment once delivery is made, there are actually situations where problems can occur. These problems may negatively impact the buyer or the seller, depending on what goes wrong. Here are a few examples of what can happen in a cash on delivery situation:

  • The buyer may write a check that bounces and the seller has no way to get the item back.
  • The seller may not package the correct item or the item is broken or damaged. Once the seller pays cash for the item, there's no recourse to get that money back.
  • The shipping company may not be reputable and may lose or misplace the cash payment.
  • The customer may not be home when the package arrives, which could significantly delay delivery.
  • The customer may decide that they don't want the item once it arrives and the seller ends up having to pay for return shipping as well.
  • Most shipping companies charge an additional fee for the cost of issuing a money order to the shipper.

Can I Insure Cash Deliveries with COD?

You can avoid many of the risks involved with COD if you accept payment using some other system. If not through credit cards, then either through an online payment system like PayPal or Google Checkout. If COD is the only option, then insuring the item is one way you can at least reduce your risk. Insurance works differently depending on which shipping service you use.


If you ship using the U.S. Postal Service, the Collect-on-Delivery (COD) service is available. When you ship COD, you can purchase insurance coverage for the item for up to $1,000. This insurance will cover your losses if the damage is either destroyed or lost during shipment. COD is not available if you're shipping the item outside of the United States.

When you ship via COD with the USPS, you can also include delivery confirmation or signature confirmation, which may further protect you from any problems with fraud or delivery mistakes. So, if you're wondering, "Can I insure cash deliveries" - in the case of the U.S. postal service, the answer is yes.


United Postal Service has been processing COD shipments for many years and will collect a COD payment up to $50,000 per package. In fact, UPS is so accustomed to the typical problems involved with COD deliveries that they actually call recipients before making delivery so that the person receiving the package will know when the package is due to arrive and that they need to have their payment ready. Due to potential problems with fraud or liability, UPS doesn't accept currency for payment. The customer has to provide either a check, money order, or cashier's check.

With UPS, insurance on COD shipments is no different than any other shipment. UPS provides free insurance coverage on every item you ship up to a $100 value. If the item is worth more than $100, then you have the option to purchase additional insurance for up to $50,000 worth of protection. If the item is lost or damaged in shipment, you will receive reimbursement from UPS for the value of the item. This is the case whether you're shipping COD or by any other means.


FedEx is the shipper of choice for many large and small businesses, so the company is very familiar with completing COD shipments. Fed Ex offers COD in the U.S. and Canada only. Fed Ex allows recipients to pay in either currency, cashier's check or money order, or a personal check. Like most shippers, Fed Ex charges an additional fee for using the cash on delivery service.

FedEx offers optional insurance of up to $100 toward the value of the item that you ship, regardless of whether the shipment was COD or otherwise.

Why Cash on Delivery?

While there are a few risks in using COD, the business advantages may be worth accepting those risks.

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