Online Shopping May Cost More as Amazon, Flipkart Raise Seller Fees and Cancellation Penalties

India's top e-commerce marketplaces, Amazon India and Flipkart, have restructured their seller fee policies ahead of the festive shopping season, introducing higher cancellation charges, increased closing fees, and new financial penalties. The strategic revisions come at a pivotal time when order volumes are set to spike, forcing digital merchants operating on thin margins to re-evaluate their pricing models and fulfillment operations.

Amazon Revises Cancellation and Closing Fees

Amazon India has revamped its seller cancellation charges for Easy Ship and Self-Ship programs, moving away from a referral-fee-based model to an order-value slab structure. Under the updated framework, sellers face a 10% cancellation charge for orders below ₹10,000, 8% for items between ₹10,001 and ₹50,000, 5% for orders priced between ₹50,001 and ₹1,00,000, and 2% for high-value orders exceeding ₹1,00,000. These fees apply when sellers cancel orders for reasons other than customer requests or fail to confirm shipment within 24 hours of the estimated date. Karnataka Suspends Food Licences of Amazon, Swiggy Instamart and BigBasket Over Poisonous Datura Sales.

Additionally, citing rising fuel and operational expenses, Amazon is raising its closing fees starting September 7, 2026. Closing charges across Fulfillment by Amazon (FBA), Easy Ship, and Seller Flex will increase by ₹1 for products priced up to ₹500 and by ₹3 for products priced above ₹500.

Flipkart Replaces Account Locks with Fixed Penalties

Flipkart has transitioned away from its previous system of locking merchant accounts for order cancellations, opting instead for a structured penalty model for sellers active on the platform for at least three months. The new framework levies per-order charges ranging from ₹30 to ₹90 based on the nature of the fulfillment failure. Merchants are fined ₹30 if they fail to hand over packages to logistics partners by the Dispatch By Date (DBD). A seller-initiated order cancellation incurs a ₹60 penalty, while missing the DBD and subsequently cancelling the order triggers the maximum ₹90 penalty.

Impact on Online Merchants and Consumer Pricing

The timing of these updates places added pressure on third-party sellers preparing for peak festive demand. With multi-layered fee increases directly squeezing contribution margins, industry observers expect sellers to pass on rising operational costs to end-consumers through reduced promotional discounts or higher list prices. Industry experts note that while pre-festive updates are common, the cumulative impact of these hikes can significantly impair small and medium-sized enterprises (SMEs) handling high sales volumes. Meta, Amazon, Flipkart, Meesho Fined INR 10 Lakh Each by CCPA for Illegal Walkie-Talkie Sales.

Strategic Shift Toward Fulfillment and Platform Yields

The policy shifts reflect a broader effort by e-commerce giants to improve logistics reliability and minimize order drop-offs, which carry heightened operational costs during high-traffic shopping periods. As rapid-delivery models and quick-commerce platforms gain market share in urban centers, standard marketplaces are placing greater accountability on sellers to ensure seamless fulfillment. By disincentivizing seller-side delays and cancellations, both platforms aim to protect customer retention rates while simultaneously driving platform revenue per order.

(The above story first appeared on LatestLY on Aug 25, 2026 08:30 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).