Is a COD Fee Legal in India? 2025 Rules Explained
We've referenced the 2025 government probe into Amazon and Flipkart's COD charges in a few other posts without digging into what the actual rule is. If you're considering adding a COD fee to your own Shopify store, here is the real legal framework behind that investigation, what it actually prohibits, and what compliant disclosure looks like.
In this guide
TL;DR
A disclosed COD fee is not illegal in India. The 2025 investigation into Amazon and Flipkart targeted vaguely labeled charges stacked on top of the stated fee (one viral case totaled ₹226 in extra charges under labels like “offer handling fee” and “protect promise fee”), which falls under drip pricing, one of 13 dark patterns formally defined in the CCPA's Guidelines for Prevention and Regulation of Dark Patterns, 2023. The CCPA has already fined platforms ₹20 lakh for dark patterns and taken action against named companies for drip pricing. The rule that matters for a Shopify merchant: show the fee as a single, clearly labeled line item before the customer commits to checkout, and never disclose it only after payment.
Why This Matters Now
We mentioned the government investigation into Amazon and Flipkart's COD fees briefly in our earlier COD fee guide and again in our marketplace fee comparison. It comes up often enough in questions from merchants considering a COD fee that it deserves its own answer, grounded in the actual legal text rather than headline coverage of the investigation.
The Legal Framework: CCPA's Dark Pattern Guidelines
On November 30, 2023, the Central Consumer Protection Authority (CCPA) notified the Guidelines for Prevention and Regulation of Dark Patterns, 2023, issued under the Consumer Protection Act, 2019. For the first time, Indian law formally defined “dark patterns” as deceptive UI and UX practices that undermine a consumer's autonomy and choice1. The guidelines apply across platforms, advertisers, and sellers, and list 13 specific prohibited patterns, including false urgency, basket sneaking, confirm shaming, forced action, subscription traps, and drip pricing1.
Drip pricing is the one that matters here. It covers concealing elements of a price during checkout, disclosing a higher price only after the customer has effectively committed, advertising something as free while withholding the real cost, or presenting a charge as unavoidable when it is not1. That is a precise, narrower target than “charging extra for COD,” and the distinction matters a lot for how you should read the rest of this post.
What Actually Triggered the 2025 Investigation
In late 2025, a Flipkart customer's social media post showing an additional ₹226 in charges on a single order went viral, broken into vague line items: an “offer handling fee,” a “payment handling fee,” and a “protect promise fee” 2, well beyond Flipkart's stated ₹10 COD fee. The Department of Consumer Affairs opened a formal investigation into Amazon and Flipkart shortly after, and in May 2025 issued formal notices to 11 platforms for violating the dark pattern guidelines3.
Union Minister Pralhad Joshi characterized the practice plainly: “Charging extra for COD is classified as a dark pattern that misleads and exploits consumers”2. Read in isolation, that quote sounds like it targets any COD fee. Read against the CCPA's actual guidelines and the specific complaint that triggered the investigation, the practice being described is charges that are hidden, vaguely labeled, or disclosed too late for the customer to meaningfully avoid them, not a transparent, single, named COD fee shown before checkout completes.
In June 2025, the CCPA issued a formal advisory directing all e-commerce platforms to conduct self-audits within three months to identify and remove manipulative design practices1, and Flipkart subsequently submitted a compliance declaration to the Ministry in line with those guidelines3.
Is a COD Fee Itself Illegal?
No. A disclosed COD fee remains standard, accepted practice among India's largest platforms, and nothing in the CCPA's guidelines or the 2025 investigation prohibits charging one. What the guidelines and mandatory disclosure rules actually require is that the checkout total include every applicable charge, with the price, and every tax and fee, visible before the customer completes the order4.
| Practice | Compliant? | Why |
|---|---|---|
| A single, named ₹50 COD fee shown when Cash on Delivery is selected | Yes | Clearly labeled, disclosed before commitment, easy to avoid by choosing another payment method |
| A COD fee revealed only at final payment confirmation | No | Late disclosure after the customer has effectively committed |
| Multiple vaguely-named charges ("handling fee," "protect promise fee") stacked on top of a stated fee | No | Concealment through obscure labeling, the core drip pricing pattern |
| A COD fee framed as unavoidable when the customer could pay online instead | No | Presents an avoidable charge as forced |
Real Enforcement Actions So Far
This is not a rule sitting unenforced on paper. The CCPA has already imposed a ₹20 lakh penalty for dark patterns covering false urgency, drip pricing, and basket sneaking5, and has taken specific enforcement action against named platforms, including a coaching platform for false urgency, FirstCry for alleged drip pricing, and Zepto for drip pricing and basket sneaking5.
Violations found under the guidelines can lead to penalties, mandatory interface redesigns, and stricter disclosure directives under the Consumer Protection Act, 20193. For a Shopify D2C brand, the exposure is the same principle at a smaller scale: the law does not distinguish between a marketplace with millions of daily orders and a single-store checkout when it comes to what disclosure actually requires.
What Compliant Disclosure Actually Looks Like
- Show the fee as a single, clearly labeled line item, not split across multiple vaguely-named charges.
- Display it the moment Cash on Delivery is selected, before the customer proceeds to payment, not revealed at final confirmation.
- Make the avoidability explicit: a customer who pays online instead should visibly not see the charge.
- Keep the name plain: "COD Fee" or "Cash on Delivery Handling Fee" rather than an ambiguous label that obscures what the charge is actually for.
This is the same guidance we gave in our earlier COD fee guide, now grounded specifically in the CCPA's legal definition of drip pricing rather than general best practice.
How CODFlip Implements This
CODFlip's COD Fee feature applies as a real Shopify shipping rate, shown as a distinct line item in the order summary the moment a customer selects Cash on Delivery, disclosed before checkout completes rather than revealed afterward. It is implemented as a genuine shipping rate rather than a synthetic add-on, so it is visible the same way any other shipping charge is, not injected as a hidden adjustment at payment confirmation.
Full detail on how the feature works in What Is a COD Fee? Meaning & Charges (2026).
Frequently Asked Questions
Is it legal to charge a COD fee in India?
Yes, charging a disclosed COD fee is standard, accepted practice among India's largest platforms and is not itself prohibited under the Consumer Protection Act. The 2025 investigation targeted non-disclosure and vaguely labeled stacked charges, classified as drip pricing under the CCPA's Dark Pattern Guidelines, not the existence of a COD fee.
What is drip pricing under Indian law?
Drip pricing is one of 13 dark patterns defined in the CCPA's Guidelines for Prevention and Regulation of Dark Patterns, 2023. It covers concealing elements of a price during checkout, disclosing a higher price only after the customer has effectively committed, or presenting a fee as unavoidable when it should be optional or avoidable by choosing a different payment method.
What triggered the 2025 investigation into Amazon and Flipkart?
A viral social media post showed a Flipkart customer charged an extra ₹226 under vague line items like an offer handling fee, a payment handling fee, and a protect promise fee, well beyond the platform's stated ₹10 COD fee. The Department of Consumer Affairs opened a formal investigation shortly after, and in May 2025 issued formal notices to 11 platforms.
What penalties exist for non-compliant fee disclosure?
The CCPA has already levied real penalties for dark patterns, including a ₹20 lakh fine, and has taken enforcement action against named platforms for drip pricing and basket sneaking specifically. Violations can also result in mandatory interface redesigns and stricter disclosure directives under the Consumer Protection Act, 2019.
Sources
- CCPA Dark Pattern Guidelines, 2023, and June 2025 self-audit advisory, Singhania & Co., “Dark Patterns in India: CCPA Guidelines”
- The ₹226 Flipkart complaint and Minister Joshi's statement, OdishaBytes, “Govt Cracks Down on Hidden COD Fees”
- May 2025 notices to 11 platforms and Flipkart's compliance declaration, Entrackr, “Consumer Affairs Ministry probes Flipkart and Amazon over dark patterns”
- Mandatory checkout disclosure requirements, “E-Commerce Rights in India (2026 Legal Guide)”
- CCPA enforcement actions and penalties, ANI News, “Govt says CCPA imposes Rs 20 lakh for dark patterns”
See how CODFlip's COD Fee stays compliant by design
Read the full feature breakdown, or check out the product page for pricing and setup.