1 week ago
Amazon and Flipkart Tighten Seller Fees Before Festive Shopping
Amazon and Flipkart are online marketplaces where sellers offer products to customers.
Both companies are changing the money sellers may have to pay when orders are canceled or shipped late.
Amazon now calculates some cancellation fees according to the order’s value.
These fees range from 2% to 10%, and one article says an 18% GST is added.
Amazon is also increasing certain fees because it says fuel and delivery costs have gone up.
Flipkart will charge sellers ₹30, ₹60 or ₹90 depending on what went wrong with an order.
Sellers say these charges may be difficult for small businesses with limited profits.
The changes are happening before the busy festive shopping season, while possible UPI charges could create another cost.
Amazon changed cancellation-fee calculations for Easy Ship and Self Ship orders from August 17, 2026.
Amazon’s cancellation fees range from 10% for orders below ₹10,000 to 2% for orders above ₹1 lakh, with 18% GST added.
Amazon will raise closing fees by ₹1 or ₹3 from September 7, citing higher fuel and logistics costs.
Flipkart introduced ₹30–₹90 penalties for missed dispatches and seller cancellations, including a ₹90 charge for both failures.
Sellers say the measures add pressure to small businesses ahead of festive sales and amid possible UPI merchant charges.
- Who
- Amazon, Flipkart and sellers operating on their Indian marketplaces.
- What
- The companies revised cancellation fees, closing fees and penalties for missed dispatches or seller cancellations.
- Where
- Amazon and Flipkart’s marketplaces in India.
- When
- Amazon’s cancellation-fee change took effect on August 17, 2026; its closing-fee increase begins September 7, 2026. The changes were reported on August 24, 2026.
- Why
- Amazon cited higher fuel and logistics costs for its closing-fee increase, while the penalties are intended to discourage seller cancellations and missed dispatch deadlines. The changes also come before the festive shopping season and amid possible UPI merchant charges.
Marketplace rationale
Seller concerns
Reducing cancellations and delays
Marketplace rationale
The revised charges and penalties are designed to discourage unilateral cancellations and missed dispatch deadlines.
Seller concerns
Sellers say cancellations can sometimes result from factors outside their control, such as delivery personnel failing to arrive for a scheduled pickup.
Higher operating costs
Marketplace rationale
Amazon attributed its closing-fee increase to higher fuel and logistics costs.
Seller concerns
Sellers, particularly small and medium enterprises operating on thin margins, say the new charges add to their financial burden before the festive season.
Impact on customers
Marketplace rationale
The announced changes directly target marketplace sellers rather than announcing a specific increase in consumer prices.
Seller concerns
Higher seller costs could put pressure on product prices, although the articles do not establish whether or how much customers’ final bills will rise.
Key facts
- Amazon cancellation fees
- 10% for orders below ₹10,000; 8% for ₹10,001–₹50,000; 5% for ₹50,001–₹1 lakh; and 2% above ₹1 lakh.
- Amazon cancellation triggers
- The fees apply when sellers cancel for reasons other than a buyer request or fail to ship and confirm dispatch within 24 hours of the estimated shipping date.
- Goods and services tax
- One report states that an 18% GST is charged in addition to Amazon’s cancellation fee.
- Amazon closing-fee increase
- Closing fees will rise by ₹1 for products priced up to ₹500 and by ₹3 for products priced above ₹500, beginning September 7, 2026.
- Affected Amazon channels
- The closing-fee increase applies to Fulfillment Centre, Easy Ship and Seller Flex channels.
- Flipkart penalties
- Flipkart charges ₹30 for missing the dispatch-by date, ₹60 for canceling after receiving a customer order, and ₹90 when both events occur.
- Possible UPI cost
- The government is discussing a possible Merchant Discount Rate on UPI transactions above ₹2,000, which could add costs for merchants.
Sources
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