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Refund And Cancellation Policy Under E-Commerce Platform

Online shopping in India comes with certain risks especially because you have to make a purchase without seeing or testing the product, whether it's clothing, cosmetics, personal care items, shoes, or electronic goods. You can often need to return items due to problems with size, fit, quality, colour, or delivery, and thus you should be able to get a refund or a replacement.

What are the different types of e-commerce models?

The 4 main types of e-commerce models are as follows:
  • Business to a consumer(B2C)
  • Business to business(B2B)
  • Consumer to consumer (C2C)
  • Consumer to a business model (C2B)

What are the Laws governing E-Commerce Policies in India?

  • Consumer Protection Act, 2019.
  • Information Technology Amendment Act, 2008.
  • Regulatory bodies, such as the Indian Medical Association (IMA), set rules and regulations that govern the promotion and advancement of medical sciences, as well as the improvement of public health and the general well-being of the society.

What is a Refund and cancellation policy?

A cancellation occurs when a consumer returns an item purchased on an e-commerce website. This could be due to poor quality or faulty product products that do not meet the requirements as advertised on the website at the time of purchase, or it could be that the customer found the same product with the same quality for a lower price elsewhere.

A refund policy of an E-commerce platform states that if a consumer is unhappy with a product or service, they will return it and receive a refund for the amount paid at the time of purchase. In certain situations, the consumer has a time period beyond which they cannot return the product, such as 7 days or 40 days from the date of delivery.

Role of the Consumer Protection Act, 2019

New rules and regulations regarding customer grievances were introduced by the Consumer Protection Act of 2019. To protect consumers' interests, a Central Consumer Protection Authority is to be formed under this act. Under this law, the vendor cannot refuse to accept back faulty or late-delivered products or goods that do not meet the website mentioned specifications.

The Act provides that:
  • The right to return any semi-durable or durable products purchased free of charge within 15 days of purchase if they are returned in their original condition, with no changes in shape or size, and in their original packaging.
  • The elimination of slogans such as "no refund, no substitution" by vendors
  • The assurances are included in the purchase price of the products, and the supplier is not allowed to charge the customer any additional fees for receiving the guarantees.
  • The buyer has returned faulty products and will give them back to the manufacturer's wholesaler from whom he purchased them.
  • For redress of his complaints, the consumer should turn to the consumer disputes redressal committee, the state consumer protection council, or the Central Consumer Protection Council.
  • The Central Consumer Protection Council is kept accountable for enforcing the Consumer Protection Act's provisions and regulations.
  • The authorities under the Consumer Protection Act, not the federal or state governments, bear the responsibility of maintaining jurisdiction for the enforcement of this act.

How is the Consumer Protection Act of 2019 different from the 1986 Act?

  • The Consumer Protection Act of 1986 did not establish a separate regulator, while the Consumer Protection Act of 2019 establishes the Central Consumer Protection Authority to oversee returns of products
  • Product liability: Under the Consumer Protection Act, 1986, there was no provision for product liability, and consumers had to go to civil court but could not go to consumer court, while under the Consumer Protection Act, 2019, consumers will claim compensation for their damages.
  • Consumer Protection Act, 1986 did not cover products sold over the internet that means E-Commerce whereas under CPA, 2019 all the rules of traditional buying and selling apply to e-commerce.

Information Technology Amendment Act, 2008 and E-commerce

E-commerce aids in the elimination of pen and paper transactions, paving the way for digital transactions. As a result, writing and signatures can no longer be used as legal evidence. In such a scenario, legal changes in e-commerce were needed. This act has a significant impact on the legal infrastructure as well as the laws and regulations that govern how the E-Commerce industry operates. The creation of such an act was required in order to protect consumers' privacy and security concerns. This law governs the collection, storage, and exchange of personal information collected from visitors to an e-commerce website.

Objectives of the Act
Providing legal status for transactions conducted online in the E-Commerce industry, digital signatures can be used to verify any details instead of pen and paper-based methods:
  • To make electronic data storage more convenient.
  • To make it easier to move money safely and easily between banks and other financial institutions.
  • To make the electronic maintenance and storage of accounting records easier.

What policy agreements must platforms have?

Any commerce company must have the following three legal agreements:

Return/cancellation and refund policy:
This agreement is required to inform a consumer about the return and refund policies after purchasing a product.

Terms and conditions:
This agreement establishes the rules for a customer making a transaction on the website. The parties concerned are bound by the terms of service.

Privacy policy:
The types of information that the organisation collects from consumers, the reason for collecting such data, and the rules for sharing such information are all covered by the privacy policy. Under the Technology and Amendment Act of 2008 and the Information Technology Rules of 2011, the company is expected to have this agreement.

The types of information that the organisation collects from consumers, the reason for collecting such data, and the rules for sharing such information are all covered by the privacy policy. Under the Technology and Amendment Act of 2008 and the Information Technology Rules of 2011, the company is expected to have this agreement.

Contents of a return and cancellation policy of an E-Commerce Platform

The following primary points should usually be included in a return and refund policy:
  • Whether or not a product can be returned or replaced, as well as details about the product's guarantee or warranty
  • The time frame in which the consumer must make a request for it or an exchange of the commodity.
  • A catalogue of all products those are not eligible for returns or exchanges. This is common for items that are sold at a discount or with a special deal. Clearly state the conditions that consumers must meet in order to be able to obtain a refund or replacement.
  • In certain situations, the consumer must bear the shipping costs at the time of return if the information about the same is to be included in the exchange agreement.

Remedies if the E-Commerce platform refuses to refund money to the consumer

  • If you pay for your online purchase with a credit card and the redemption period hasn't yet expired, you can ask your credit card provider to refund your money on your behalf. This is referred to as chargeback.
  • You can write emails instead of calling product suppliers because a written letter is deemed more credible and can be used to bring a lawsuit against the supplier in consumer court.
  • If your complaints are not addressed, you have one last option: go to the consumer forum or the consumer court and file a complaint against the supplier. The National Consumer Helpline (NCH) states that in case of fraudulent transactions a consumer can lodge a First Information Report (FIR) or make a police complaint or to Cyber Cell, if company is not traceable. To file a complaint with NCH one can call on 1800-11-4000 or 14404 (all days except national holidays from 9.30 am to 5.30 pm), and they can also send SMSes. Besides, there is the option to file complaints online either on NCH website or app is also available.
  • Determine if the E-Commerce company or the supplier is at fault, and then take necessary action. In the event of a defective product, the supplier is ultimately responsible for refunding your money.

Tips for consumers to have a hassle free experience on an E-Commerce Platform

  • Before you buy from an unknown e-commerce company, do some research on them? If you're unsure, don't buy it
  • If you are buying from a site for the first time, go for cash on delivery
  • Read the terms of use and privacy policy before making a purchase.
  • Understand cancellation, return and refund policies
  • Ensure that the e-commerce company's customer service information, such as its location, email, and phone number/helplines, is available.
  • Understand the product and warranty descriptions, and see if the material you need is available in sufficient quantities.
  • Check that the product can be sent to your postal pincode before making a payment.
  • Take a screenshot of the product/service you bought in case the company changes the price or definition of the product later.
  • Be wary of statements like no trade or refund, refund handling fees, and so on. Companies are required by the Consumer Protection Act to include an exchange, return, or refund if a product or service is defective.
E-commerce, or electronic commerce, refers to the buying and sale of goods and services, as well as all other commercial transactions that take place over the internet. Today, E-Commerce has grown sector in India and has aided millions of vendors in expanding their markets by allowing them to sell their goods on a much larger scale online, something that would have been nearly impossible in the conventional go-and-buy retail commerce.

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