Customer Support Ruling

Mailing Standards

Headquarters, US Postal Service

Washington DC  20260-3436

Collect on Delivery (COD) Mail

July 1993

PS-197 (503.11)                                                                                                   

This CSR discusses the change in COD service to stop the fraudulent exploitation of postal customers.

The change, which took effect on June 7, 1987, was intended to curb the fraudulent exploitation of postal customers by a small number of individuals who took advantage of the requirement that COD charges must be paid in cash (or, in some cases, by check made payable to the Postal Service) which was then converted into a Postal Service money order to be sent to the mailer.  These individuals would send COD shipments which had either not been ordered by the addressee or which contained items not as represented by the mailer.  In such cases, the addressee could not examine the contents until he or she had paid for the shipment.  In far too many instances, the addressee paid the COD charges, opened the parcel and discovered too late that he or she had been victimized.

This change was the result of a long series of public proceedings about the most appropriate way to deal with the growing problem of COD fraud.  On February 12, 1986, following Congressional hearings on the subject in November of 1985, the Postal Service filed a request with the Postal Rate Commission for an advisory opinion on a change to COD service which would allow COD recipients to pay COD charges by personal check.  The Commission issued a notice of this proceeding in the Federal Register (58 Fed. Reg. 6842) and the date of implementation became effective on June 7, 1987.

The COD recipient determines the method of paying the charges.  The Postal Rate Commission did consider allowing the mailer to control the method of payment for COD charges.  However, this proposal was specifically rejected by the Commission, because "boiler room" operations could specify "cash only," leaving the COD recipient with no recourse against COD fraud.  Thus, "cash only" endorsements on COD articles are not permitted.  In addition, a mailer may not specify that payment may be made only by a certified check.

Under postal regulations, recipients of COD mail may pay for the items received by writing a check made payable to the mailer for the amount due, or by paying cash so that a postal money order for the amount due can be returned to the mailer.  When a customer pays COD charges by check, the addressee post office annotates its portion of the COD tag with the check number and the date the check was sent back to the mailer.  The check returned to the mailer is annotated with the COD number.  The Postal Service cannot intervene in disputes between mailers and recipients of COD mail after postal records indicate a check or money order was returned to the mailer.

Anita J. Bizzotto

Manager