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Amazon and Flipkart have changed seller fees and penalties ahead of India’s festive season. Here are the new cancellation charges, penalties and why sellers are concerned.
Amazon has changed the way it calculates cancellation fees for sellers using its Easy Ship and Self Ship services. The revised system came into effect on August 17, 2026.
Amazon and Flipkart have changed their fee and penalty structures for sellers in India ahead of the festive shopping season. The new rules cover order cancellations, dispatch delays and other fulfilment-related issues, with sellers warning that the additional costs could put more pressure on small businesses operating with limited margins.
Amazon has changed the way it calculates cancellation fees for sellers using its Easy Ship and Self Ship services. The revised system came into effect on August 17, 2026. Instead of linking the charge to category-specific referral fees, Amazon now calculates the cancellation fee as a percentage of the order value.
Flipkart, meanwhile, introduced a three-level penalty system for fulfilment-related lapses from August 23. Depending on what went wrong with an order, sellers can now face penalties of Rs 30, Rs 60 or Rs 90 per shipment.
Here’s what Amazon has said in its response to News18 Tech:
“Customer and seller experience is at the heart of everything we do at Amazon. We expect orders placed by customers to be fulfilled reliably by sellers on our marketplace. To encourage timely and dependable fulfilment, we have revised cancellation fees for Easy Ship and Self-Ship sellers. This fee is conditional and only applies in the rare event of a seller-initiated cancellation, which accounts for less than 1% of orders on Amazon.in. We have appropriate measures in place to ensure sellers are protected when cancellations are due to circumstances beyond their control,” as said by Amazon spokesperson.
Amazon’s New Cancellation Fee Structure For Sellers
Amazon’s revised cancellation policy applies to sellers using Easy Ship and Self Ship in India. Under the new structure, the cancellation fee is determined by the value of the order rather than the earlier category-based calculation.
| Order Value | Cancellation Fee |
|---|---|
| Below Rs 10,000 | 10% |
| Rs 10,001 to Rs 50,000 | 8% |
| Rs 50,001 to Rs 1 lakh | 5% |
| Above Rs 1 lakh | 2% |
An 18% Goods and Services Tax (GST) is applicable on top of the cancellation fee. Amazon says the charge applies when a seller cancels an order for a reason other than a buyer request. It can also apply when an order is automatically cancelled because the seller fails to ship and confirm it within 24 hours of the estimated ship date.
For example, a cancellation on an order worth Rs 8,000 would attract a 10% fee, or Rs 800, before GST. The revised system therefore has the potential to make cancellations significantly more expensive for sellers handling lower-value products.
What Are Amazon Easy Ship And Self Ship?
Amazon’s Easy Ship model allows sellers to store and pack their products themselves, after which Amazon’s delivery network takes over the shipment. Under Self Ship, sellers are responsible for arranging delivery themselves, using their own logistics partner or courier service.
The cancellation fee change covers both these models. Amazon says the revised structure is intended to create a more consistent fee calculation across product categories.
Amazon To Increase Closing Fees From September 7
The cancellation fee is not the only seller-related charge Amazon is changing. The company has also announced an increase in closing fees for products sold through its Fulfilment Centre, Easy Ship and Seller Flex channels.
The new closing fees will take effect from September 7, 2026. Amazon says the increase is linked to higher fuel and logistics costs. Products priced up to Rs 500 will see the closing fee rise by Re 1, while products priced above Rs 500 will see an increase of Rs 3.
A closing fee is a fixed charge levied by Amazon when a seller sells an item on the platform. It is separate from other charges, including referral and fulfilment fees.
Flipkart’s Three-Tier Seller Penalty System Explained
Flipkart has also introduced a new penalty structure covering missed dispatch deadlines and cancellations. The policy took effect on August 23, 2026.
| Situation | Penalty Per Shipment |
|---|---|
| Order not ready for pickup by the committed Dispatch By Date | Rs 30 |
| Seller cancellation or automatic cancellation after three missed dispatch deadlines | Rs 60 |
| Order delayed beyond the dispatch deadline and subsequently cancelled | Rs 90 |
Under the earlier system, missing a Dispatch By Date could result in a seller’s account being temporarily locked. The new approach shifts towards financial penalties for different types of fulfilment failures. New sellers are reportedly exempt from the policy during their first three months on the platform.
People familiar with the development told PTI that the objective is to encourage sellers to plan their inventory and fulfilment better while improving the customer experience.
Why Amazon And Flipkart Sellers Are Unhappy
Sellers argue that not every cancellation or delay is necessarily caused by them. One concern raised by sellers on Amazon’s own seller forum is that a shipment can sometimes be cancelled because a logistics executive does not arrive for a scheduled pickup. In such cases, sellers question why they should have to bear a cancellation charge.
Amazon has said it has measures in place to protect sellers when cancellations happen because of circumstances outside their control. The company also said seller-initiated cancellations account for less than 1% of orders on Amazon.in.
Another concern is the overall difference in costs between different fulfilment models. One seller cited in reports claimed that the total fees between Amazon’s fulfilment network and Easy Ship could differ by as much as Rs 45 per unit for comparable orders, raising concerns about competitive parity.
Seller representatives have also warned that the timing of the changes could make things more difficult for micro, small and medium enterprises (MSMEs). The festive period is one of the most important sales windows for online sellers, but it also brings higher inventory, packaging, staffing and logistics costs.
Vinod Kumar, Trustee of the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), said sellers understand the need for reliable fulfilment and good customer service. However, he argued that marketplaces should clearly establish responsibility before imposing financial penalties.
The broader concern among sellers is that repeated fee increases and penalties could eventually reduce already-thin margins. For smaller businesses, even a relatively small charge per shipment can become significant when multiplied across hundreds or thousands of orders during the festive season.
What The New Rules Mean For Sellers
For sellers on Amazon and Flipkart, the changes make accurate inventory management and timely dispatch more important than ever. Sellers will need to ensure that stock levels are updated, orders are packed on time and shipments are handed over within the prescribed deadlines.
At the same time, sellers are seeking clearer mechanisms to dispute penalties when a cancellation or delay is caused by a logistics issue rather than a failure on their part. The debate highlights a larger challenge for India’s e-commerce marketplace: platforms want reliable fulfilment for customers, while sellers want fee structures that account for problems outside their control.
With the festive shopping season approaching, both sides will be under pressure to balance faster fulfilment with manageable operating costs. For sellers, the latest changes mean that cancellations and missed dispatch deadlines could now have a more direct impact on their bottom line.
Key Questions Answered
Ask News18New cancellation fees implemented by Amazon and Flipkart are expected to increase the financial burden on small businesses, which often operate with limited margins. Sellers are concerned that these additional costs will put more pressure on their operations.
Ask News18August 25, 2026, 16:41 IST
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