The short answer
Cold transfer redirects the caller and releases the transferring party at once. It is fast, cheap and appropriate when the destination is a queue that will take the call regardless. It is the wrong choice when context matters, because the receiving party gets a caller with no explanation and the transferring party is no longer there to recover.
In detail
The transferring party issues a redirect and drops out. In SIP this is typically a REFER, after which the caller is connected to the new destination directly. There is no consultation leg, so the transfer completes in a fraction of the time a warm transfer takes and consumes none of the receiving party’s time up front.
The trade-off is unrecoverable failure. If the destination is busy, unstaffed or misconfigured, the transferring party has already released the call and cannot intervene. Whether the caller hears a queue, a voicemail box or a disconnect is entirely determined by the receiving system.
Cold transfer suits routing to a monitored queue, to an after-hours voicemail, or to a department where the caller will restate their need anyway. It suits escalation badly: sending a frustrated caller to a human with none of the context the agent already gathered guarantees the caller repeats themselves, which is precisely the experience the agent was deployed to avoid.
Related terms
Warm transfer
A warm transfer is a handoff in which the transferring party briefs the receiving party before the caller is connected to them.
Call leg
A call leg is a single connection between the telephony platform and one endpoint, of which a complete call may contain several.
IVR
An IVR is an automated phone system that presents callers with a predefined menu and routes them according to keypad or spoken selections.
SIP
SIP is the signalling protocol used to establish, modify and terminate real-time voice and video sessions over IP networks.