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Government Probes E-Commerce Charging Extra on COD Orders
The Department of Consumer Affairs (DoCA) has opened a formal investigation into e-commerce sites for allegedly charging unstated fees to consumers who choose to pay online with cash-on-delivery (COD) purchases. Online retail platforms typically impose these extra fees during the checkout process.
Soon after the government lowered taxes on several commodities in advance of the nation's holiday season, the National Consumer Helpline got thousands of complaints about GST. This is when the inquiry began.
The Department of Consumer Affairs will carry out a thorough investigation into complaints made against e-commerce platforms, according to a tweet made by Union Consumer Affairs Minister Pralhad Joshi on X (previously Twitter). The minister referred to the additional fees for COD orders on these services as a "dark pattern that misleads and exploits consumers" in relation to these complaints.
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The minister's tweet on X cited another user, Sidnan (@sidnan_s), who shared a screenshot of a Flipkart checkout screen, but he did not identify which e-commerce sites would be investigated by the DoCA. An "Offer Handling Fee," "Payment Handling Fee," and "Protect Promise Fee" are among the three fees depicted in the image that are applied to a single transaction. It is important to remember that Amazon charges a fee to users who make purchases through the online marketplace. According to the platform's support page, all users—including those with Amazon Prime subscriptions—are charged a set "Amazon Marketplace Fee" of Rs. 5.
Similar to this, rapid commerce apps such as Zomato and Swiggy impose additional fees (such as a "rain fee") just prior to a payment being made, which users who have purchased a premium subscription must also pay. In relation to the Goods and Services Tax (GST) rate reductions that took effect on September 22, the DoCA disclosed that 3,981 complaints against different companies had been filed with the National Consumer Helpline, which runs the 1915 hotline, since that date. The department stated at the time that the helpdesk was working to take action against companies that did not drop their items' maximum retail price (MRP) when taxes were lowered.
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The choice to investigate e-commerce platforms is an indication that future transactions may be made with more transparency. Before making any online purchases in the meantime, clients can see the ultimate price and charge breakdown at checkout. Additionally, they can use the hotline to report instances of hidden costs on e-commerce platforms to the National Consumer Helpline.
The ASCI pointed out that these were systematic design methods integrated into the user journeys of many apps, especially in industries like online gambling, banking, and e-commerce, rather than isolated or coincidental aspects
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The ASCI pointed out that these were systematic design methods integrated into the user journeys of many apps, especially in industries like online gambling, banking, and e-commerce, rather than isolated or coincidental aspects. Consumer advocacy groups have frequently pointed out that because these tactics are covert, consumers frequently aren't aware that they've been pushed or deceived until after they've finished a transaction.
