Swiggy and Zomato refuse to refund customers for cancelled orders

Indian food and grocery ordering companies Zomato and Swiggy refuse to refund their customers if they cancel their order. This has been noted to occur when the customers pay in advance for their food orders (prepaid orders).

The cancellation policy of Swiggy states that they may withhold the refunds if a prepaid customer cancels their order deeming such cancellation a "breach of contract".

The terms of service of Zomato similarly calls such cancellation an "Authorization Breach" for which they claim the right to withhold the refund amount.

There are two consumer rights concerns with such practices:

1. This information is not shown to the customer when they are paying for their order in advance. This information is hidden in the cancellation policy page or terms and conditions pages of the apps that most customers of the apps do not usually click on as it is written in a lengthy and legal manner. A quick but imperfect word count of the length of Zomato's terms of service page using two command-line tools available on a GNU/Linux system (pandoc -f html -t markdown "https://www.zomato.com/policies/terms-of-service/" | wc -w) tells us that the page contains approximately 22,479 words. The firefox browser's reader mode also estimates an average reader to take 116-148 minutes to read through Zomato's terms of service page from start to finish.

2. There is no exact definition of what may constitute an action that can be deemed "breach of contract" or "Authorization Breach" provided within the policy. This gives Swiggy and Zomato full discretion to decide what actions may or may not fall under the term. There is no way for the customers or the restaurants who receive the order to challenge the decision of Swiggy or Zomato to not refund the customer under this policy.

These policies also negatively affect the restaurant owners as they receive no compensation for a cancelled order and further have their payouts reduced by the sum of refunds for cancelled orders. The food prepared by the restaurants before the order is cancelled also goes to waste.

The has been an inquiry instituted to review these practices by the Central Consumer Protection Authority of India.