Amazon, Flipkart under probe for charging extra on cash-on-delivery orders
What's the story
The Ministry of Consumer Affairs is looking into complaints regarding additional charges for cash-on-delivery (CoD) orders by major e-commerce platforms like Amazon and Flipkart. The investigation will also look into why refunds are delayed or blocked when prepaid orders are canceled. The move comes as part of a broader effort to protect consumer rights amid India's booming e-commerce market, projected to reach $345 billion by FY30.
Fee details
Fee structure and consumer shift
According to reports, Amazon charges ₹7-10 and Flipkart and FirstCry charge an additional ₹10 for CoD payments. This is on top of the platform fee, which varies across different online retailers. The move has reportedly led to a shift in consumer behavior, with many opting for prepaid orders instead of paying extra for CoD.
Market trends
CoD preference and trust issues
A survey by the Indian Institute of Management-Ahmedabad found that nearly 65% of consumers preferred CoD for their last online purchase, with fashion and clothing products being the most popular. This trend was especially prominent among low-income households earning less than ₹3.6 lakh annually. The survey also revealed trust issues as a major reason behind this preference for CoD over prepaid orders.
Growth potential
E-commerce growth and government intervention
The Indian e-commerce market, currently worth about $160 billion, is expected to grow to $345 billion by FY30. With 881 million internet users, India is set to become the world's third-largest online retail market by 2030. The Ministry of Consumer Affairs is reviewing complaints against platforms over CoD charges and delayed refunds. It plans consultations with e-commerce companies, consumer rights organizations, and industry bodies for a balanced solution between operational needs and consumer protection.
Industry response
Industry response and consumer concerns
Industry representatives have defended the CoD fee, saying it was introduced to prevent frequent order cancellations that disrupt inventory and logistics planning. However, Consumer Voice, a consumer protection group, argues these charges and delivery delays are causing concern among buyers who feel cheated as their money remains blocked while platforms earn interest on it.