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The comfort of Cash on Delivery, a payment method highly favoured by millions of Indian shoppers, is now at the center of a major government inquiry. India’s Consumer Affairs Ministry has launched a significant examination into the practice of e-commerce giants, specifically Amazon and Flipkart, charging a fee for COD orders. The ministry is consulting with consumer rights bodies and various e-commerce consumer groups to determine if this charge is a justifiable cost or a clear case of an unfair trade practice.
For many Indians, the option to pay upon delivery is not merely a convenience but a pillar of trust in the online shopping experience. This is especially true for those making big-ticket purchases like electronics, appliances, and high-value fashion items. Yet, many consumers feel penalised for choosing this secure option.
Data underscores the widespread displeasure with the charge. A recent survey revealed that 65 percent of consumers reported dissatisfaction over the COD fee. The collective consumer voice has reached the ministry, prompting the current crackdown. The government’s review is not just limited to the COD charge however. It also encompasses other troubling practices reported by consumers. These include instances where e-commerce firms allegedly refuse or block prepaid orders or delay refunds for cancelled or returned items, creating unnecessary hurdles for the shopper.
The e-commerce platforms, naturally, offer a defense for their fee structure. They argue that the small charge is a necessary deterrent against what they term "frivolous orders" that result in costly returns. More fundamentally, the fee is designed to offset the significant additional expenses and risks associated with handling cash. Logistics partners must manage cash collection, security, reconciliation, and timely deposits all of which add complexity and cost to the delivery chain. Flipkart, for instance, charges around five rupees for orders below one thousand rupees, with Amazon maintaining a similar structure. They state this fee is simply a way to share the high logistics and operational burden.
Regardless of the industry’s justification, Cash on Delivery remains a critical lifeline for India’s e-commerce growth. The preference for paying upon delivery is massive a survey conducted earlier this year found that nearly 60 percent of consumers opted for COD in February 2025. This preference is strongly linked to the country’s vast and fast-growing base of internet users who may be new to online shopping or who simply lack faith in digital payment security. COD bridges the trust gap making the purchase feel tangible and safe.
India’s e-commerce market is currently valued at an impressive $115 billion and is projected to skyrocket to $315 billion by the year 2030. Ensuring fair and transparent practices is essential for this exponential growth. The sheer volume of complaints reflects the urgency of the issue over thirty-five thousand grievances against e-commerce platforms were registered in 2024 alone.
The Consumer Affairs Ministry is acting on these complaints aiming to establish a clear policy framework. The consultation with consumer rights groups and industry stakeholders is a crucial step towards finding a balance a balance that encourages e-commerce to thrive while simultaneously protecting the rights and financial interests of the average buyer. The outcome of this scrutiny will undoubtedly reshape the way millions of Indians shop online for years to come demanding that major e-tailers demonstrate greater transparency in their pricing and fairness in their transactions.
