Govt Probes E-Commerce Platforms for Charging Extra on Cash-on-Delivery Orders

The Ministry of Consumer Affairs has launched an investigation into e-commerce platforms that charge additional fees for Cash-on-Delivery (COD) orders. The government has termed this practice a “dark pattern” — a misleading method that manipulates or exploits consumers.

Consumer Affairs Minister Pralhad Joshi announced on X (formerly Twitter) that several complaints were received against such platforms. “A detailed investigation has been initiated, and strict action will be taken against those violating consumer rights to ensure transparency in India’s e-commerce ecosystem,” he said on October 3.

This move comes amid growing concerns over deceptive online practices, where small, unclear charges during checkout can lead to large-scale consumer exploitation.

Why Is the Government Investigating COD Fees?

The probe follows numerous complaints filed earlier this year after certain e-commerce companies began adding “cash handling fees” to COD orders.

The issue gained public attention in July when Zepto users shared screenshots on social media, accusing the company of adding hidden charges at checkout. Such fees may fall under the category of “drip pricing”, one of the 13 deceptive practices listed as dark patterns under Indian consumer law.

What Are Dark Patterns?

Dark patterns are deceptive digital designs or tactics used by websites and apps to trick users into making decisions they might not otherwise make. These can include hidden charges, confusing wording, or visual tricks that guide customers towards a company’s preferred action — often at the consumer’s expense.

For example:

• Hiding delivery fees until the final payment step.
• Using urgent messages like “Only 1 item left!” to push impulse buys.
• Pre-selecting consent boxes for newsletters or data sharing.
• Making it hard to find the “unsubscribe” button.

In November 2023, the Ministry officially identified 13 types of dark patterns — including drip pricing, false urgency, bait-and-switch, confirm shaming, trick questions, and forced action — and categorised them as “unfair trade practices” under the Consumer Protection Act, 2019.

How Common Are These Practices in India?

According to a 2024 report by the Advertising Standards Council of India (ASCI), 52 out of the 53 most downloaded mobile apps in India use at least one kind of deceptive design.

These include hidden fees, repetitive pop-ups, misleading consent options, and interface interference. The report stated that these were not accidental but part of systematic design strategies adopted by companies, especially in e-commerce, fintech, and gaming sectors.

Consumer advocacy groups have often pointed out that users rarely realise they’ve been misled until after they’ve made a purchase or shared personal information.

What Steps Is the Government Taking?

The investigation into COD-related fees is part of a broader push by the government to promote fairness and transparency in digital markets.

Earlier, on May 28, 2025, the Ministry of Consumer Affairs held a meeting with top e-commerce executives, directing them to:

• Conduct internal audits of their platforms to identify dark patterns.
• Publicly share audit results.
• Ensure full compliance with the 2023 guidelines on deceptive online practices.

The government also proposed forming a joint working group of officials and industry representatives to address the evolving challenges of digital consumer protection.

For the ongoing COD fee probe, officials are reviewing evidence, studying consumer complaints, and checking whether the charges were disclosed transparently — and at what stage during checkout.

What Could Be the Outcome?

If the investigation confirms violations, the platforms could face action under the Consumer Protection Act. This may include:

• Monetary penalties.
• Mandatory interface redesign.
• Stricter disclosure requirements for all fees and charges.

The outcome of this probe will likely have a major impact on India’s e-commerce industry, especially since COD continues to be a preferred payment mode for millions of shoppers, particularly outside metropolitan cities.

The government’s stand makes it clear — online platforms can no longer hide behind technical loopholes or subtle design tricks. Transparency, fairness, and clear disclosure will be the new norms in India’s digital marketplace.