Copyright 2002, Roadracing World Publication, Inc.

By David Swarts

There are no UPS safeguards for merchants shipping a package COD to an unknown private party.

According to United Parcel Service (UPS) spokesperson Steve Holmes, the only method of payment acceptable for a UPS COD (collect on delivery) shipment is check or money order, but UPS is not liable if that check or money order is fraudulent.

“It’s the merchant who has chosen to take the risk by accepting the check. If you’re accepting checks from unknown people, unknown customers, that would be the merchant’s decision to take that risk,” said Holmes in a telephone call to Roadracingworld.com from UPS headquarters in Atlanta, Georgia. “It’s the same as if a merchant sells merchandise via credit card. UPS is not liable if that credit card is fraudulent.

“It’s no different than at the store-level if someone is going to decide whether or not to accept checks. We’re only serving as the conduit of the payment in that scenario. If the merchant chooses to accept checks, then they have opened themselves to the risk of accepting checks.”

Holmes was sympathetic to the story of KWS owner Kevin Hunt’s negative experience shipping via UPS overnight COD delivery (see related post, KWS Warns Motorcycle Businesses Of Counterfeit Check Scam, 12/3/02), saying, “If there was an investigation to go on, we would cooperate in terms of answering police questions. Unfortunately, that is the way the world has become. There are bad apples out there that are going to try to scam a system one way or another.” Holmes suggested not shipping COD to unknown parties.

Even with the risks involved, Holmes says shipping by COD is still a popular choice for businesses. As evidence, Holmes referenced a Forbes magazine article he said he helped a reporter put together. That article, according to Holmes, stated that Gateway Computers shipped eight percent of its computers COD in 1999.

UPS, through its financial subsidiary UPS Capital Corporation, offers “COD Secure,” a COD payment guarantee service, but the payment insurance program is only for business-to-business shipping.