FirstCry Ordered to Pay Rs 50,000 Compensation for Unjustified Order Cancellation

A District Consumer Disputes Redressal Commission has directed online baby products retailer FirstCry to pay Rs 50,000 as compensation, along with a refund of Rs 2,130 with interest, after finding that the company cancelled a customer's order without justification, withheld his payment and internally labelled him as a fraud user.

What was the complaint?

The complainant, Shaik Altaf, placed an order for a children's tricycle on FirstCry on December 1, 2024, and paid Rs 2,130.06 through PhonePe. However, the order was cancelled the very next day without any explanation, and the amount was not refunded.

When Altaf contacted customer care, he was informed that the amount had been adjusted against a previous order from 2023. According to FirstCry, he had allegedly returned incorrect products in that transaction to obtain a refund while retaining the original items.

Altaf denied the allegation, stating that the return had been accepted after pickup and warehouse quality verification in accordance with FirstCry's own policies. He also pointed out that he had never received any email, call or written communication raising concerns about the earlier return.

'Fraud user' tag under scrutiny

The commission noted that FirstCry had internally flagged the transaction as a "fraud user order cancel", effectively branding the complainant a fraudster without conducting any inquiry or giving him an opportunity to respond.

What did the commission say?

The commission found FirstCry's defence contradictory. While the company had admitted before the National Consumer Helpline that refunds related to the 2023 transaction had already been processed, it later cited alleged fraud in that same transaction to justify withholding payment for the new order.

"Once refunds were issued after verification, it is not open to the opposite party to later allege that the returned products were incorrect and deny refund in a subsequent transaction. This contradictory stand is arbitrary," the commission observed.

"The conduct of the opposite party in cancelling the order, withholding the refund, taking inconsistent stands, and marking the order as 'Fraud Order' without due process amounts to deficiency in service and unfair trade practice. Such action also affects the dignity and reputation of the complainant, causing mental agony," it further noted.

Settlement offer noted by commission

The consumer commission also took note of the fact that FirstCry's representative had contacted Altaf three times after the complaint was filed and offered a settlement of Rs 2,190 as refund along with Rs 15,000 as compensation.

While this was not treated as a direct admission of wrongdoing, the commission observed that it indicated the company was aware of the weakness in its position.

Defence rejected

FirstCry also argued that the order had been placed by a different individual, identified as Sameer Basha Bamri. However, the commission rejected this claim after examining payment records and order details submitted by the complainant.

The document produced by FirstCry in support of its defence was found to be illegible and unreliable.

Relief granted

The commission directed FirstCry to refund Rs 2,130 with interest at 9% per annum from December 1, 2024, until realisation. It also ordered the company to pay Rs 50,000 as compensation for mental agony and Rs 5,000 towards litigation costs.

The payments are to be made within 45 days. The commission further directed the company to "curb such unfair trade practices" in the future.