During a time when all the ecommerce giants such as Amazon and Flipkart are busy with festival season sales, the Ministry of Consumer Affairs is looking into complaints regarding additional charges for cash-on-delivery (CoD) orders by these major e-commerce platforms.
Protecting Consumer Rights
Besides this, they are also investigating why refunds are delayed or blocked when prepaid orders are canceled.
With this move, the Ministry of Consumer Affairs is to protect consumer rights amid India’s booming e-commerce market, projected to reach $345 billion by FY30.
When it comes to the Amazon, it charges ₹7-10 and Flipkart and FirstCry charge an additional ₹10 for CoD payments.
Besides this they also charges platform fee, which varies across different online retailers.
This has definitely affected the consumer behaviour with many opting for prepaid orders instead of paying extra for CoD.
Consumers Trust Issues Influencing CoD Preference
Nearly 65% of consumers preferred CoD for their last online purchase, with fashion and clothing products being the most popular according to a latest survey by the Indian Institute of Management-Ahmedabad.
This is especially prominent among low-income households earning less than ₹3.6 lakh annually.
The main reason behind this is the trust issues as it is a major reason behind this preference for CoD over prepaid orders as revealed by the survey.
So far, the Indian e-commerce market holds a worth about $160 billion and it is expected to grow to $345 billion by FY30.
With Moving ahead, India is set to become the world’s third-largest online retail market by 2030 with 881 million internet users.
With such big numbers, it becomes a crucial task so, the Ministry of Consumer Affairs is reviewing complaints against platforms over CoD charges and delayed refunds.
For the coming times, Ministry of Consumer Affairs plans consultations with e-commerce companies, consumer rights organizations, and industry bodies for a balanced solution between operational needs and consumer protection.
In its defence, the industry representatives have defended the CoD fee, saying it was introduced to prevent frequent order cancellations that disrupt inventory and logistics planning.
Contrary to this, these charges and delivery delays are causing concern among buyers who feel cheated as their money remains blocked while platforms earn interest on it as per the Consumer Voice which is a consumer protection group.
