A US-based customer who was visiting India in December had ordered 10 products from the Delhi-based ethnic wear brand Aachho in November. The order had to be delivered to Mumbai and she was supposed to carry them back with her to the US in January. She only received eight of them and the remaining two never got delivered.
After several rounds of communication with the company to get the remaining products delivered, a day before her flight she asked for a refund on the undelivered products. But she was told that a refund would not be possible and she could only avail of a store credit which was valid for three months.
“I purchased 10 products from Aachho that were worth Rs 35,000 and sadly two of my most loved products did not get delivered on time. If the product is delivered, I will have to leave it at a relative’s place in India and I can only see them when I am back in the country next year,” said the NRI customer on the condition of anonymity.
Several buyers have been victims of such policies in online retail. Generally, the return policies of the companies are unclear and the client is offered store credits instead of refunds. The return policies are not displayed clearly on a website and are mostly found at the bottom of the page where one can reach after multiple scrolls. This makes it difficult for customers to have a clear understanding of the companies’ policies.
What are Dark Patterns?
Dark patterns are practices that are intended to manipulate buyers into making decisions that are commercially beneficial to e-commerce players. The methods include drip pricing, triggering FOMO (fear of missing out), disguised advertising, bait and switch, fake urgency, and forced continuity, among others.
Sachin Bishnoi, a Haryana-based customer of beauty and wellness e-commerce platform Nykaa told The Core how he was tricked into ordering facewashes and perfumes that were branded as part of an exclusive offer on Nykaa, and the offer was valid for a limited period. “I received a pop-up notification from the Nykaa app that said the products (perfumes/facewashes) were on sale for 50% off and only available for a limited period. I instantly ordered. After receiving the products, I checked the price of the same products in the market, it was much cheaper than what I got from Nykaa. The limited-time offer triggered me to buy the product but in reality, the offer continued until the next day with the same discount,” said Bishnoi.
Hemanshu Yadav, a 24-year-old product intern at transport management software company Keeboot Global in Bengaluru, said that fashion e-commerce platform Myntra placed his order, despite Yadav deciding not to proceed with it. “I was scrolling through Myntra and almost purchased a pair of Nike shoes for Rs 4,000. I clicked on the payment page but then immediately changed my mind and cancelled the transaction. As I returned to the order placing page, I noticed that Myntra had automatically put the purchase as cash-on-delivery,” he told The Core. He said that he checked with his other friends whether it was a one-off incident but was surprised to find that several of them had similar experiences.
There have been significant discussions about these practices followed by online platforms. The government is trying to address these anti-consumer methods through effective guidelines. Between November to December 2023, the government sent multiple notices to Amazon India for tricking customers into purchasing its Prime membership. "Amazon.in has knowingly duped millions of consumers into unknowingly enrolling in its Amazon Prime service (“Nonconsensual Enrollees” or “Nonconsensual Enrollment”)," the notice by the Central Consumer Protection Authority (CCPA) said, reported Moneycontrol.
On November 30, the CCPA released guidelines aimed at curbing deceptive practices of e-commerce companies. These guidelines specifically addressed 'dark patterns', which are considered wrongful practices, and classified them as offences under consumer protection law. It identified 13 dark patterns in e-commerce platforms and said that if e-commerce companies failed to follow the guidelines, they would face penalties for pushing false advertisements that mislead users into clicking on them.
More Ways To Trick
The simplest dark pattern is visiting a website and subscribing to an email list, from which you then cannot unsubscribe and end up paying for every month.
In the context of product returns, the average e-commerce return rate is roughly 20-30%. E-commerce companies generally do not disclose the return policies upfront. Consumers often end up buying products without explicit knowledge about return and refund policies. Shreya Suri, partner with the TMT Practice at IndusLaw who handles several start-up clients in the e-commerce space told The Core, “If a website or a platform is making it very clear that this is a non-returnable product and the norms are clear, it may not qualify as a dark pattern. And of course, that knowledge has to come before the purchase actually happens. So those things would be considered important information for determining whether or not you want to purchase something.”
Another way of confusing consumers is through store credit. Many brands that sell high-end products do not process a refund and instead issue a store credit note. Unhappy with the service, the customer is often not willing to go back to the same brand which makes such a policy unhelpful.
“Issuing a credit note seems to be a marketing strategy as it is a way to get the customer to return to the online store. That said, Consumer Protection (E-Commerce) Rules … require inventory e-commerce entities to provide refunds in certain scenarios. From the perspective of ‘Unfair Trade Practice,’ it is important to assess whether refund/exchange policy is violative of the said rules,” Karun Mehta, partner at law firm Khaitan & Co told The Core.
Is There a Law in Place?
The Department of Consumer Affairs has also issued the Consumer Protection (e-commerce) Rules, 2020 under the Consumer Protection Act of 2019 to protect consumers from unfair trade practices in e-commerce. The purpose of these guidelines is to define the duties of e-commerce companies and specify the liabilities of marketplace and inventory e-commerce organisations. Additionally, they offer a set of measures to effectively handle customer complaints.
“As dark patterns take away the consumer's right to ‘informed consent’, they are prohibited practices. From the perspective of product return policy, it would depend on a case-to-case basis, i.e., what is the return policy/ process adopted? Let’s say, if the return process has add-on complexity, that it does not allow the customer to avail it easily, it could be considered a dark pattern,” Mehta said.
The Consumer Protection Act does not explicitly address the issue of misleading return policies. However, within the main act, there is an implicit requirement that says if refunds are not allowed for faulty merchandise or the termination of substandard services under specific circumstances, it may imply that the company is engaging in an unjust business practice or it may be perceived as a deceptive advertisement.
Suri said that giving a refund to the consumer is a mandatory obligation only in certain limited circumstances and mostly it’s the seller’s prerogative. However, whether a refund will be available or not must be made known to the prospective consumer at the pre-purchase stage in very clear terms.
“If the product is defective or broken, they are good grounds for a refund and you are mandated under the law to get that refund. In other circumstances where no refund is advertised or if it is stated that any returns, etc will be subject to a return policy, it becomes a bit of a buyer-beware situation. So you may need to look into that policy, it should not be misleading to the consumer to believe that they will get the money back, but instead, they only end up getting store credit,” Suri said.