Amazon, Flipkart tighten seller fees and penalties ahead of festive season

E-commerce sellers face higher cancellation and fulfilment costs as Amazon and Flipkart tighten policies ahead of the festive shopping season

PGurus Newsdesk

August 25, 2026

Amazon and Flipkart tighten seller charges and penalties ahead of the festive shopping season, raising concerns over rising business costs

New charges target cancellations and delays as sellers brace for festive-season pressure

E-commerce giants Amazon and Flipkart have revised their fee and penalty structures for sellers ahead of the festive shopping season, raising concerns among small and medium businesses already operating on thin margins. The changes target order cancellations, delayed dispatches and fulfilment-related lapses.

Amazon, from August 17, has changed the way cancellation fees are calculated for sellers using its Easy Ship and Self Ship services. The fee is now linked to order value: 10% for orders below Rs 10,000, 8% for orders between Rs 10,001 and Rs 50,000, 5% for orders between Rs 50,001 and Rs 1 lakh, and 2% for orders above Rs 1 lakh. An additional 18% GST applies to the fee.

The charge applies when a seller cancels an order for reasons other than a buyer’s request. It can also be imposed if the seller fails to ship and confirm an order within 24 hours of the estimated shipping date, resulting in automatic cancellation. Amazon has also announced an increase in closing fees from September 7, with charges rising by Rs 1 for products priced up to Rs 500 and by Rs 3 for products above Rs 500.

Flipkart introduces three-tier penalty system

Flipkart has introduced a three-tier penalty structure effective August 23. Sellers will face a Rs 30 penalty if an order is not ready for pickup by the committed Dispatch By Date. A seller cancellation or an automatic cancellation after three missed dispatch deadlines will attract a Rs 60 penalty, while an order that is first delayed and subsequently cancelled will incur a Rs 90 penalty.

Under the earlier system, missing the dispatch deadline could result in a temporary lock on the seller’s account. Flipkart said the revised structure is intended to encourage better fulfilment practices and improve the customer experience. New sellers on the platform, for up to three months from the beginning of their selling journey, will be exempt from the new policy.

Seller representatives, however, have raised concerns that cancellations and delays may sometimes result from logistics failures, platform-related issues, sudden demand spikes or customer-related factors. They have called for transparent attribution of responsibility and a mechanism to challenge penalties that sellers believe are wrongly imposed.

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