E-commerce marketplaces Amazon India and Walmart-owned Flipkart have revised their seller fee structures, introducing steep cancellation penalties and higher closing charges right before the upcoming festive shopping rush. Amazon shifted to an order value-based cancellation fee ranging from 2% to 10%, while Flipkart instituted a three-tier penalty system charging up to Rs 90 for missed dispatch deadlines and unfulfilled orders. Amazon is also increasing closing fees across key fulfillment channels starting September 7. Both platforms aim to enforce strict delivery reliability during peak online sales, but merchant bodies worry that the increased costs will burden small and medium enterprises.
Key Takeaways
- Amazon now charges cancellation fees between 2% and 10% based on total item value, plus 18% GST.
- Amazon will raise closing fees by Rs 1 to Rs 3 per product from September 7.
- Flipkart rolled out penalties of Rs 30, Rs 60, and Rs 90 for delayed dispatches and seller-side cancellations.
- Customer-initiated cancellations remain exempt from these penalties on both marketplaces.
- Trade associations express concern that small sellers will face tighter profit margins or pass costs to consumers.
Amazon Revises Cancellation Slabs and Closing Charges
Amazon India implemented a percentage-based cancellation fee on August 17 for sellers using Easy Ship and Self Ship services. Under the updated framework, the platform calculates fees on item value rather than referral percentages:
- Orders up to Rs 10,000 face a 10% cancellation fee.
- Orders priced between Rs 10,001 and Rs 50,000 carry an 8% fee.
- Orders from Rs 50,001 to Rs 1,00,000 attract a 5% fee.
- Orders above Rs 1,00,000 face a 2% fee.
Amazon applies this charge when sellers cancel orders directly or fail to ship within 24 hours of the estimated dispatch schedule. Starting September 7, Amazon will also raise closing fees by Rs 1 for goods up to Rs 500 and by Rs 3 for goods above Rs 500 across Fulfillment Center, Easy Ship, and Seller Flex models.
Flipkart Imposes Graded Penalties on Delays
Flipkart introduced a graded penalty structure on August 23 targeting dispatch failures. A seller pays Rs 30 if they fail to hand over goods to the logistics partner by the agreed Dispatch-By Date (DBD). Direct seller cancellations attract a Rs 60 penalty, which rises to Rs 90 if a seller misses the initial dispatch deadline and then cancels the order.
Seller Concerns and Festive Impact
Merchant associations like the Forum for Internet Resellers, Sellers and Traders (FIRST India) stated that logistics bottlenecks and high festive order surges often cause delays outside a merchant’s control. With rising costs on low-margin goods, small businesses may adjust retail discounts during festive sales like the Great Indian Festival and Big Billion Days to protect their operating margins.
Frequently Asked Questions
Q1. Why did Amazon and Flipkart increase seller cancellation fees?
A1. Both marketplaces revised their fee policies to reduce order cancellations, enforce timely dispatches, and maintain delivery reliability during high-volume festive sales.
Q2. Do buyers have to pay cancellation charges under the new rules?
A2. No. The revised fee structures apply only to seller-initiated cancellations and operational delays, not to buyer-requested cancellations.
Q3. When do the new closing fee changes take effect on Amazon?
A3. Amazon’s revised closing fees take effect on September 7, increasing rates by Rs 1 to Rs 3 per item depending on product price.
Q4. What is the maximum penalty on Flipkart for a delayed order?
A4. Flipkart charges up to Rs 90 per order if a seller misses the agreed dispatch date and subsequently cancels the shipment.
