Hidden Charges in Indian Ecommerce: Dark Patterns, CoD Fees & Govt Probe
India’s online shopping market has crossed $136 billion in 2025 and is growing at almost 20% every year. More than 900 million Indians are now on the internet, and by 2028 online sales will make up 14% of all shopping in the country. The growth looks amazing on paper.
But millions of shoppers are angry.
In October 2025, one Flipkart bill went viral on X (Twitter). The customer thought he was paying ₹29,999 for a phone. At the final payment page he saw three surprise charges:
- Offer Handling Fee – ₹99
- Payment Handling Fee – ₹49
- Protect Promise Fee – ₹79
Total extra: ₹227 on a single order.
Thousands of people started sharing similar stories. The government took notice. Minister Pralhad Joshi and the Department of Consumer Affairs launched a major investigation into Amazon, Flipkart, Meesho and other big platforms for using “dark patterns” – clever design tricks that push people to spend more without realising it.
This guide explains everything in simple, clear language: why Cash-on-Delivery is still king, where the extra money goes, what the government is doing, and how you can protect yourself.
What Exactly Is the Government Investigating?
The Ministry’s investigation has two primary focus areas:
Hidden or Ambiguous Extra Charges
Several platforms reportedly added extra fees only after the buyer selected CoD or progressed deep into checkout. These include:
- CoD surcharges
- Handling fees
- Payment processing fees
- “Promise protection” or “order safety” charges
- Optional service fees pre-selected by default
Under India’s 2023 guidelines from the Central Consumer Protection Authority (CCPA), these fall under “drip pricing”, a banned dark pattern where the full cost is revealed only at the end.
Refund Delays on Prepaid Orders
Consumers have flagged:
- Slow refunds after prepaid cancellations
- Refund initiation delays during festive sale periods
- Lack of clear refund timelines
The Ministry is checking whether any platform intentionally holds consumer funds longer than necessary or designs refund steps to discourage cancellations.
No official findings are published yet, but the investigation is active.
Why 65% of Online Shoppers Still Choose Cash-on-Delivery (CoD) in India?
Digital payments are breaking records. In October 2025 alone, UPI handled 20.7 billion transactions worth ₹27.28 lakh crore. That is a 9.5% jump in just one month, mostly because of festive sales.
Yet a huge 2024 survey by IIM Ahmedabad (35,000 people, 25 states) found:
- 65% paid cash when the delivery agent came
- Only 35% paid online in advance
Main reasons people gave:
- “I trust it more – I can check the product first”
- “Returns are easier”
- “I don’t have to worry about online fraud”
This is especially true in Tier-2, Tier-3 cities and villages. People there often spend more per order (up to 77% higher) than city customers because they buy bigger items like fans, coolers or furniture only when they can pay cash after seeing the product.
Around 40% of rural online shoppers still use CoD because many do not have active bank accounts or simply fear digital cheating.
Why Ecommerce Companies Say CoD Costs Them More Money
Running CoD is expensive for companies. Here are the real numbers:
- CoD orders cost 40-50% more to fulfil than prepaid orders
- Return-to-origin (RTO) rate for CoD = 20-30% (sometimes even 40%)
- Return rate for prepaid orders = only 1-2%
- Delivery agents have to visit the same address 2-3 times in many cases
- Cash collection, counting and bank deposit leads to mistakes or shortages in almost 20% of cases
When the charge is shown only on the final payment page (and not on the product page), it is called “drip pricing” – and it is now officially a dark pattern.
The Most Common Dark Patterns in Indian Apps Today
Dark patterns are clever tricks built into the app or website. Here are the ones you see every day:
- False urgency – “Only 2 left!” or “Sale ends in 5 minutes!” (timer resets when you refresh)
- Basket sneaking – an extra item or insurance gets added without your permission
- Hidden costs – price looks low on product page, fees appear only at payment
- Confirm-shaming – “No, I don’t want to save ₹200” button to make you feel stupid
- Hard to cancel – subscription – easy to join, almost impossible to leave
In 2024, the Advertising Standards Council of India checked the 53 most-downloaded apps. 52 of them used dark patterns. Netflix, Swiggy, Zomato, Ola – almost everyone was on the list.
What the Indian Government Has Done So Far (2023-2025)
- November 2023 – Government officially banned 13 types of dark patterns under the Consumer Protection Act
- May 2025 – Sent notices to many platforms asking them to remove dark patterns
- October 2025 – Started fresh investigation into CoD charges and refund delays
- Companies must now do internal audits and submit reports
- Fine can go up to ₹50 lakh per violation, plus orders to redesign the app
By November 2025, 26 companies (including Meesho) claimed they had removed all dark patterns. But independent checks still found problems in many of them.
Refund Delays – The Silent Money-Maker
When you pay online and cancel or return an item, companies often take 7-14 days to return your money. During festive sales, complaints jumped 300%. Amazon alone received 50,000 calls on the National Consumer Helpline.
While your money sits in their bank account, companies earn interest. Experts estimate this adds up to ₹500 crore every year – money that actually belongs to customers.
What Other Countries Are Safeguarding Against These Patterns
Governments worldwide have taken significant steps against hidden charges and dark patterns.
- USA (2025) – Amazon paid $2.5 billion fine for forcing people into Prime membership without clear consent.
- Europe – Companies can lose up to 6% of worldwide revenue if they use dark patterns
- South Korea – 30 days’ notice required before increasing any subscription price
India is catching up fast, but we still need stronger rules for class-action lawsuits (when many customers sue together).
How Small Sellers Are Affected by CoD
Most people think only customers lose money. Actually, small sellers lose too. When a customer returns an item, the seller has to pay back the full amount, but the platform keeps its “handling fee”.
A 2025 survey showed 45% of small businesses say these fees are eating into their profit. Many are now moving to ONDC or Instagram/WhatsApp sales to escape high charges.
Check & Report – 7 Simple Tips
- Take a screenshot of the final payment page every time – proof helps when you complain
- Choose prepaid payment when possible – you save ₹20-₹100 and get the product faster
- If you see hidden charges, complain immediately on National Consumer Helpline 1915 or consumerhelpline.gov.in
- Use browser (not app) sometimes – dark patterns are weaker on desktop sites
- Read the breakup carefully before clicking “Place Order”
- Support platforms that are open about fees (some new apps show total price on the product page itself)
- Spread the word – share this article with family and friends so everyone stays safe
Conclusion – Dark Patterns Banned, Yet 97% Apps Still Use Them
India’s ecommerce ecosystem depends on millions of users who are still building trust in digital transactions. Hidden fees, vague surcharges, and manipulative design patterns undermine that trust at a critical moment in the industry’s growth.
The government’s investigation, along with independent audits, confirms a widespread issue that needs systematic correction. The path forward is clear:
- Transparent pricing
- Clear refund communication
- Honest user-interface design
- Regular audits and enforcement
With these changes, India can move toward a digital commerce environment where users understand exactly what they pay for, and platforms compete on value, not opacity.
Sources:
- https://www.ftc.gov/news-events/news/press-releases/2025/09/ftc-secures-historic-25-billion-settlement-against-amazon
- https://www.pib.gov.in/PressReleasePage.aspx?PRID=1983994®=3&lang=2
- https://www.pib.gov.in/PressReleasePage.aspx?PRID=2134765®=3&lang=2
- https://www.pib.gov.in/PressReleasePage.aspx?PRID=2191948®=3&lang=2
- https://doca.gov.in/ccpa/slef-audit-companies-dark-pattern.php
