In today’s world of digitisation, online banking has evolved as new normal banking for all of us. With that, everything has been served on a platter. Be it shopping, ticket booking, buying groceries, paying bills, ordering food and much more. There is no doubt that online banking has simplified our life.
But, have you ever cancelled any transaction? How long did you wait for the refund? 5 days? Or, maybe more.
This may hold true for a failed transaction. But when the transaction is successful and you cancelled the order, the refund should not take more than 2-3 days. The internet firms are smart enough to put a caveat of 5-15 days for processing the refund, however, failed to provide any justification.
Unfortunately, Reserve Bank of India has no regulations in place to set the benchmark for defining the standard refund timeline for these internet companies.
In most of the instances, these firms put the onus on the banks for the long wait. National Payments Corporation of India has mandated banks to accept or reject any incoming transaction within a turnaround time (TAT) of 5 days.
Here is an example, how e-commerce companies follow unfair practices. This is a real transaction with a food delivery startup which has recently raised Series E funding.
Day 1: Order cancelled due to unavailability of stock. Customer care made a refund commitment of 3-4 days to the original source of the transaction, and not their in-app wallet.
Day 3: Customer followed up. Customer Care reverted saying, “We are sorry about the wrong information. We have processed the refund already from our side. However, the bank will credit your account with 5-7 days. Since it has been only 2 days, we request you to allow some more time.” The customer care person further added, “We request you to contact the bank for the same. We inform TAT as per the process.”
Day 6: The customer received a notification, both via email and SMS, about the processing of the amount from the food delivery startup. It also mentioned that bank may take another 5-7 days for processing the amount, but it got credited immediately.
The customer questioned back and challenged the Day 3 communication. In reply, customer care explained, “We are sorry for any disappointment caused. The refund was processed into your in-app wallet, however, the transfer will take 5-7 days.”
This is not just one of the case. It happens every day with many of us, but we decide to ignore due to our priorities in life. Does this allow some of the e-commerce firms to earn undue interest/ financial gains from your money in an unfair way?
Oh, wait! RBI regulations say that every e-commerce company needs to maintain a nodal account and there needs to be disclaimer as well. The directive also indicates these accounts are to be strictly maintained by banks. It also says that the payment to merchants needs to be settled with T+2 days if the transfer of funds does not involve nodal banks, else it will be T+3 days. Every online company needs to put a disclaimer about their nodal account.
However, the reality reflects a different picture. We have seen merchants queuing up in front of the online companies demanding their long-pending dues. Now, the question arises – How many online companies have the nodal account? Are they abiding by the law of the land?
What do you think? Should there be regulations from the government to monitor the refund money and, keep a track of the nodal accounts by every e-commerce firms?
How have been your experience of online refunds? Share your experience too.
Author: Rahul Nag – There is always fishy in the Terms and Conditions document. With all the patience, Rahul loves to read these mysteries. He believes that the truth needs to unfold hidden in these documents. He earns his living by working as a communications professional and lives his passion by writing on business mysteries. Follow him on Twitter and network with him on Linkedin
Rahul, nice explanation about the process and steps about transaction fail and refunding the amount.
Now-a-days online shopping is going with every business who had a website, here the customer has to take care of payment mode whether the payment had success or not.
I bought a phone from Flipkart which was 50k+ in cost, using a credit card. Then phone was not available in my choice of color so I after waited too long I have cancelled the order. Refund didn’t come to the credit card and payment due date came so I have to arrange 50k by breaking my FD because if I have missed the due date then Bank must have charged me with interest + penalty + service tax on those charges. So to avoid those I had to pay. Can you imagine 50k+ amount stucked in refund process and another 50k+ liability bill hanging and if I won’t pay bank would ready to cut my throat with charges!! And Flipkart was saying sorry in every email.