Cash on Delivery (COD) Transactions in Trade in the Digital Era

An Islamic Business Ethics and Fiqh Muamalah Perspective

Abstract

Digital trade, such as online buying and selling, has transformed conventional transaction patterns and given rise to new payment methods such as Cash on Delivery (COD). This article is motivated by the rapid growth of e-commerce in Indonesia and the emergence of ethical and legal problems surrounding COD practices, such as unilateral cancellation by buyers. Accordingly, this article aims to analyze COD from the perspective of Islamic business ethics and fiqh muamalah, covering Islamic ethical views, a review of the classical schools of law (Hanafi, Maliki, Shafi'i, and Hanbali) and contemporary scholars, as well as its practical implications. This research employs a qualitative library-research method, using document analysis, comparison, and content analysis of primary, secondary, and tertiary legal materials. The findings show that COD has the potential to violate the principles of honesty, sharia compliance, and fairness if not properly managed. From the perspective of fiqh muamalah, the majority of scholars of the four schools permit COD as long as it fulfills the pillars and conditions of the salam or istisna' contract, with the exception of the Shafi'i school, whose scholars hold differing views owing to differences in the COD transaction scheme applied. Meanwhile, contemporary scholars further specify the type of contract applicable to COD. The study also identifies three concrete recommendations—constituting the practical implications of this research—intended as a practical guide for business actors and for the formulation of sharia-compliant COD regulation.