Customer Alleges Extra Fee on Cash-on-Delivery Order, Govt Steps in With Probe Against E-Commerce Players

A thorough inquiry into complaints against e-commerce sites that charge extra for choosing to pay using cash-on-delivery (COD) has been initiated by the Department of Consumer Affairs. In a recent tweet, Union Minister Pralhad Joshi referred to these tactics as "dark patterns" that deceive and take advantage of customers, and he pledged tough measures against those who engage in them in order to safeguard consumer rights and advance openness in India's rapidly expanding e-commerce industry.

Commenting on the development, Chirag Taneja, Co-Founder & CEO, GoKwik stated, "Cash-on-delivery (COD) has been India’s trust bridge—especially for first-time shoppers and emerging D2C brands. When a customer hasn’t heard of a brand, COD lets them pay only when the product is in hand, building confidence without forcing a prepay decision. At the same time, COD carries real costs: logistics partners levy cash-handling fees, and brands face high RTO risk (often 30%+ for COD) from failed deliveries or fraud. For small businesses operating on thin margins, that directly hits unit economics."

"An additional COD fee isn’t a penalty; it’s a cost-offset that preserves viability while keeping COD as a choice. It also nudges digital payments without removing flexibility. The key is transparency—clearly disclosing what the fee covers and why it exists. Practical, pro-consumer measures like partial COD, reconfirmation before dispatch, and better address/intent checks can further protect genuine shoppers and merchants alike," he added.

How E-Commerce Sties Came in Government’s Radar?

The problem was discovered when multiple customers complained that they were assessed additional costs when they chose the COD option rather than prepaid payment methods. A well-known e-commerce company charged him INR 226 under unclear headings like "offer handling fee", "payment handling fee", and "protect promise fee", according to one X user.

By drawing comparisons to other costs, such as the "Rain Fee" seen on food delivery services like Zomato, Swiggy, and Zepto, the user mockingly lambasted these prices. Joshi addressed these worries in a tweet on 3 October, stating that businesses violating consumer rights will face severe consequences and that these activities will be closely examined.

What is Dark Patterns E-Commerce's Preferred Option?

Dark patterns are deceptive design strategies used by businesses to obtain information or funds from customers without their full knowledge. These include deceptive signals like phoney countdown timers for offers, complicated, difficult-to-notice costs hidden deep within checkout processes, or exhibiting false scarcity ("only one or two items left").

One of the best examples of these unethical tactics is charging more for payment options like COD under ambiguous fee titles. The government is currently working on new regulations to combat these misleading practices and has already urged e-commerce corporations to stop them. The Jagriti app, which makes it easier to file complaints about unfair commercial practices, encourages customers to report these infractions.