Cashbacks have become a popular marketing tool used by e-commerce platforms to attract and retain customers. However, these promotional schemes are subject to regulatory oversight to ensure that they are fair, transparent, and do not mislead consumers. Various consumer protection laws and advertising standards apply to cashbacks in online retail.
This law covers unfair trade practices including misleading advertisements or offers related to cashbacks. Platforms must clearly disclose the terms and conditions of cashback offers.
ASCI mandates that promotional offers, including cashbacks, must not be deceptive or ambiguous. The actual benefit, eligibility, validity period, and redemption process must be clearly communicated.
Cashbacks involving digital payments may fall under RBI regulations regarding prepaid payment instruments (PPIs) and wallet usage, ensuring transparency in refunds and credits.
The Consumer Protection (E-Commerce) Rules, 2020 require e-commerce entities to provide complete information about promotional schemes, including cashbacks, on their websites and apps.
An online shopping app offers a 10% cashback on electronics but fails to disclose that it applies only on purchases above ₹5,000 and expires in 3 days. A customer makes a purchase of ₹3,000 expecting cashback but receives none.
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