FILE PHOTO: Amazon logo is seen in this illustration
| Photo Credit:
Dado Ruvic
Amazon and Flipkart have tightened penalties for marketplace sellers, raising cancellation and other charges at a time when sellers are preparing for the upcoming festive season and facing higher operating costs.Amazon has revised cancellation fees for sellers using its Easy Ship and Self-Ship services, linking the charge to the value of the order, instead of the earlier referral-fee-based structure.Effective August 17, sellers will be charged 10% of the order value for cancellations on orders below ₹10,000, 8% for orders between ₹10,001 and ₹50,000, 5% for orders between ₹50,001 and ₹1 lakh, and 2% for orders above ₹1 lakh, according to a seller communication reviewed by businessline.The charge applies when a seller cancels an order for reasons other than a buyer request. It can also be levied if Amazon cancels an order because the seller fails to ship and confirm it within 24 hours of the estimated shipping date.Amazon is also increasing its closing fees from September 7, citing higher fuel and logistics costs. The fee will rise by ₹1 for products priced up to ₹500 and by ₹3 for products priced above ₹500. The increase will apply across its Fulfilment Centre, Easy Ship and Seller Flex channels, according to a separate seller communication.Flipkart, meanwhile, has introduced a new per-order penalty structure for sellers who have been on the platform for at least three months, according to people familiar with the matter.Under the new structure, sellers will face penalties ranging from ₹30 to ₹90 depending on the nature of the order failure. A ₹30 penalty is applicable when a seller fails to hand over an order to Flipkart’s logistics partner by the agreed dispatch-by date (DBD). The penalty rises to ₹60 when a seller cancels an order after receiving it from a customer.If a seller misses the DBD and subsequently cancels the order, the penalty is ₹90.Amazon and Flipkart did not immediately respond to businessline’s queries.The moves by the two largest e-commerce marketplaces come ahead of the festive sales period, when order volumes typically rise sharply and marketplace sellers increase inventory and fulfilment capacity. Sellers are also facing potential additional costs from changes to UPI merchant discount rates (MDR), adding to pressure on margins.Published on August 24, 2026
