Prank orders: Why Flipkart won't deliver goods worth more than Rs 10k in UP

Flipkart, India's largest e-commerce dealer has decided that it will stop delivering good worth more than Rs 10,000 to customers in Uttar Pradesh, according to a report in Times of India.

The reason: According to Flipkart executives in Lucknow, customers would log onto the site, order for fun via the cash at the delivery scheme and then refuse to pay. The report adds that there have also been cases of fraud in which lost or stolen credit cards were used to book orders online.

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While logging on and ordering goods that they don't intend to buy might be an excellent 'timepass' and fun ride for some customers, this was causing massive losses to Flipkart and its sellers as the cost of transporting the goods, storing them in their warehouse and packaging is high.

And now, thanks to bigger players like Amazon entering the market, Flipkart can ill afford to incur these losses.

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These reports highlight the problems that still plague the e-commerce industry in India. Internet penetration is still very low in India when compared to the country's population, only 150 million or so are online.

So yes for e-commerce groups, the number of customers is still very low but its growing at a steady rate thanks to the growth of smartphones and mobile devices and better Internet connectivity.

But when customers start pranking a website that has just start expanding its business, it does spell trouble for how e-commerce will function in India.

And for genuine buyers in Uttar Pradesh, the ban means that they can't access goods that might not always be available in their town.

Disclaimer: Firstpost is owned by Network18 which also owns HomeShop18 that competes with Flipkart.