Why Courier COD Payments Come Short (and How to Check)
By ProfitIQ · Updated · 3 min read
Deductions that are normal
Before suspecting an error, know what a courier is entitled to take from the cash it collects on your behalf.
- The delivery charge in your tariff, often rising with weight and distance.
- A COD handling fee, if your agreement includes one.
- Tax withheld at source, where the law requires the courier to deduct it from payments to you.
- Return and re-attempt charges for parcels that came back or needed a second delivery try.
- Surcharges your contract allows, such as for remote areas.
Deductions worth questioning
- Weight adjustments where the weight billed is higher than the parcel’s real weight, including volumetric weight on a box that was bigger than it needed to be.
- A rate that is not in your tariff, or one that changed without notice.
- Return charges for parcels that were delivered, which usually means a status error.
- The same charge taken twice, for instance when a parcel is split across two settlements.
- Parcels paid as delivered that you never shipped, which are overpayments you may have to give back.
Timing is not a shortfall
Couriers settle in cycles, and a delivered parcel appears in a later batch. A parcel that is late is not a parcel that is short. Compare the delay with the settlement terms in your agreement before treating it as a dispute, and keep a list of delivered parcels not yet settled so that nothing is forgotten.
How to check, in five questions
- Was this parcel delivered in my records, and in the courier’s?
- Is the charge the courier deducted the one in my tariff for this weight and distance?
- Is there tax withheld, and is it at the rate that applies to me?
- Is there a return or re-attempt charge, and did that really happen?
- Does the net transferred equal COD, minus all of the above?
One parcel, checked
- COD collected
- $40.00
- Delivery charge, per tariff
- − $3.80
- Tax withheld at the applicable rate
- − $1.60
- Expected transfer
- $34.60
- Actual transfer
- $32.60
- Unexplained difference
- $2.00
Illustrative figures. $2.00 on one parcel is small; the same $2.00 on hundreds of parcels in a settlement is not, which is why checking each parcel matters.
Small differences add up
A courier does not need to be dishonest for you to lose money. A systematic rounding rule, a default weight or an out-of-date tariff costs a little on every parcel, and only parcel-by-parcel matching shows it.
Making a dispute stick
Send a single document with tracking numbers, the amount expected, the amount received and the proof of delivery. Refer to the clause in your agreement. Keep the response. The full process is in the reconciliation guide, and ProfitIQ’s reconciliation tools produce the dispute report from your data.
Frequently asked questions
Why did my courier pay me less than the COD amount?
Because it deducted its delivery charge, any tax it must withhold, and return or re-attempt fees before paying you. If the total deducted is more than your agreement allows, the difference is a dispute.
Is withholding tax on COD payments normal?
In some countries, including Pakistan, couriers are required to withhold income tax and sales tax from payments to merchants. It is a legal deduction, not an error, but it should be at the right rate.
How do I dispute a short COD payment?
Send the courier the tracking numbers, the amounts you expected and received, proof of delivery and the relevant clause of your agreement, in one document, and keep their reply.