Department of Consumer Affairs to Probe E-Commerce Platforms Over Hidden Cash-on-Delivery Charges

The Department of Consumer Affairs (DoCA) has launched a formal probe into e-commerce platforms for allegedly levying hidden charges when customers opt for cash-on-delivery (popularly known as COD orders) as the mode of payment when making a purchase online. These additional charges are usually added during the checkout process on online retail platforms. The investigation comes shortly after the National Consumer Helpline received thousands of GST-related complaints after the government slashed taxes on several goods ahead of the festive season in the country.

Hidden Charges on E-Commerce Platforms Classified as 'Dark Patterns'

In a post on X (formerly Twitter), Union Consumer Affairs Minister Pralhad Joshi said that the Department of Consumer Affairs will conduct a detailed investigation into complaints received against e-commerce platforms. These grievances are related to additional charges for COD orders on these services, and the minister called it a "dark pattern that misleads and exploits consumers". 

While the minister didn't specify which e-commerce platforms will be probed by the DoCA, his post on X quoted another user Sidnan (@sidnan_s) who posted a screenshot of a checkout screen on Flipkart. The image shows three fees levied on a single purchase, including an "Offer Handling Fee", "Payment Handling Fee", and "Protect Promise Fee".

It's worth noting that Amazon also includes a fee for customers who make purchases via the online marketplace. The platform's support website confirms that it charges a flat Rs. 5 "Amazon Marketplace Fee" for all customers, including those who have an Amazon Prime subscription.

Similarly, quick commerce apps like Zomato and Swiggy also add various charges (including a "rain fee") right before a payment is initiated, and these must also be paid by customers who have paid for a premium subscription.

On Thursday, the DoCA revealed that the National Consumer Helpline (which operates the 1915 hotline) has received 3,981 complaints against various companies since September 22, in connection with Goods and Services Tax (GST) rate cuts that went into effect on the same date.

At the time, the department said that the helpline is working to take action against businesses that fail to lower the maximum retail price (MRP) of their products after taxes are reduced.

The decision to probe e-commerce platforms is a sign that customers could see additional transparency while making purchases in the future. Meanwhile, customers can keep an eye out on the final price and breakdown of charges during checkout, before making any purchases online. They can also report instances of hidden charges on e-commerce platforms by contacting the National Consumer Helpline via the hotline.