Another Financial Fraud has been Unearthed; this time it is “Zepto”.

AS smart applications have become the synonym of today’s human demands, and in the process of replenishing our daily food wants, we all buy groceries. Today, with the advancement of App Based Services, most companies deliver the groceries at our door step vide their App.

Similar is in the case of “ZEPTO” – India’s first unicorn startup in 2023. As the company claims that Zepto app is not another grocery delivery app but a platform that promises 10-minute deliveries of groceries, built to revolutionise the selling and deliveries of groceries. Customers can now conveniently purchase 25000+ products and get them delivered to their doorstep with the help of Zepto’s 10-minute e-grocery delivery app.

Things were running smooth, and the company has demonstrated their On-Time Deliver traits. But recently, a user shared an alleged malpractice wherein Zepto levied an additional “Cash Handling Fees”. The Zepto customer further claimed that the app itself changed the default payment settings to “Pay Cash/UPI on delivery” instead of the regular “Pay Online” option, calling it a dark pattern that customer may miss due to muscle memory or while being in a hurry.

Sharing a couple of screenshots of Zepto’s payment page, the user who goes by the handle @RaoSumukh, wrote: “Zepto has changed its default CTA on the order screen to “Pay Cash/UPI on delivery” instead of the “Pay Online” option. Most people tap the button on the right due to muscle memory. Seems harmless at first, because you would think you just have to pay the delivery executive via UPI instead of paying online. WRONG. This is where the dark pattern starts“.

The angered customer added that Zepto automatically added ₹15+GST as “cash handling fees”, which, according to them, most people may miss while placing an order. “Also, it only shows up once you hit the order button, and it’s a time-limited message that vanishes in a few seconds. It is NOT a part of the final invoice that you can view before placing the order”, the user further added.

Another user Anmol Jain has shared her anguish; Having ordered from Zepto, the Cart showed ₹392 including all taxes & handling charges, accordingly the order was placed vide COD.

When the Delivery Partner arrived, he asked for Rs. 418/- further reiterating it to be ‘Cash Handling Fees’. Upon checking the bill Anmol Jain found, there had been a sudden ‘Cash Handling’ fee of Rs. 25/- that wasn’t shown in the breakup in the Cart. To reaffirm the discrepancy, she had ordered again; but no such fee was mentioned.

THE MATRIX –

Only after tapping “Pay on Delivery”, a 10 seconds timer, appears with an option to ‘cancel the order’ with absolute tiny fonts: ‘₹5 + GST charged for cash handling fees’. The amount finally changes.

So, @ZeptoNow quietly supplements a ‘cash handling fee’ only after order confirmation and checkout, hidden under a ticking 10 seconds timer.

Classic UX dark pattern. Not cool. Tiny font, rush timer. By the time you notice (in case you notice), it’s too late. This is not just deceptive. It’s outright cheating. The additional charge is not even mentioned when choosing payment mode. This amounts to a willful and misleading omission. And then the psychological tactics like countdown timers or urgent prompts are used to discourage you from reading carefully, so you miss small-font disclaimers.

The Consumer Protection (E-Commerce) Rules, 2020 require transparent disclosure of the total price including all charges upfront, before the consumer places an order. Hence, it is textbook unfair trade practice.

Zepto’s promoters are Aadit Palicha and Kaivalya Vohra, the co-founders of the company. They founded Zepto in 2021 and are actively involved in the company’s management and direction. Aadit Palicha serves as the CEO, while Kaivalya Vohra is the CTO. They are also working to increase Indian ownership in Zepto, potentially ahead of an IPO.

Zepto is primarily funded by a mix of institutional and angel investors. Motilal Oswal Private Wealth led the latest funding round, with 13 investors participating in total, including 54 institutional investors. Key investors include Y Combinator, Goodwater Capital, Glade Brook Capital, and angel investors like Mohandass Kalaichelvan.

Zepto’s most recent funding round, a Series G round, was held on November 21, 2024, and raised $350 million, with Motilal Oswal Private Wealth as the lead investor. However, Zepto has raised a total of $1.95 billion across 10 funding rounds.

Team Maverick