Seller VS Limeroad: Vendor demands Rs 12 lakh unpaid dues; etailer says seller owes money

Editor | Sep 15, 2020

It is not just Snapdeal sellers that are fighting for their dues. Indian Online Seller (IOS) received a desperate call from a vendor who claims that fashion etailer Limeroad owes him Rs. 12 lakhs!

“We are from Broche Impex, one of the biggest export houses of North India. Fraud has been done by Limeroad with us. We have pending payment of 12 lakhs with Limeroad. We have ended the stock since 3 months, since then these people just keep on promising for the resolution but nothing has been done till now,” wrote the seller to IOS.

Over several calls, messages and emails, he shared his tribulations of being a seller, with IOS. Read along to understand what led to this situation and also Limeroad’s side of the story.

The problem started during demonetisation

As you know, Indian government abolished higher denomination notes of Rs. 500 and Rs. 1000 in November 2016. The demonetisation drive impacted the ecommerce business, in particular cash-on-delivery orders. Limeroad seller Broche Impex (would be referred as BI from here on) was one of the sellers whose business took a hit due to demonetisation.

BI sells on all leading online marketplaces like Flipkart, Paytm, Shopclues, Voonik, Amazon, Snapdeal, and Rediff. They started selling on Limeroad in January 2016 because the etailer approached them to join their portal.

BI says that there was a surge in sales and returns post November 2016. Surge in sales because, people wanted to get rid of their discontinued currency notes by placing COD orders. And surge in returns because when Limeroad, just like other ecommerce companies refused to accept old notes, buyers promptly returned the packages unopened.

Why should I pay penalty and commission for unopened orders, asks the seller

Trouble started when Limeroad asked BI to pay up commissions and penalties for the returned orders. The vendor alleges that the etailer placed the fake orders to earn commission and penalties. BI shares that due to demonetisation, COD orders were rejected by buyers at doorstep. But he still had to pay lakhs in form of commission and other fees to Limeroad. He seeks reimbursement for that.

IOS asked Limeroad that do they reimburse seller commission, logistics and other charges if unopened packages are returned by buyers and the seller wasn’t at fault.

Limeroad’s spokesperson says,

As a part of the vendor policy, we do not charge the vendor if packages are not accepted by the customer. In fact, the complete cost of to and fro is borne by LimeRoad as we make sure that we don’t charge our Seller Partners for the same.”

Since, BI and Limeroad were saying two different things, IOS got in touch with other vendors to get an unbiased viewpoint.

While speaking to IOS, online sellers Devendra Goyal and Sarthak Agarwal confirmed that:

  • Limeroad doesn’t charge vendors for RTO or customer rejected packets (No commission, no forward shipping, and no reverse shipping). They only charge for customer returns and octroi
  • Limeroad pays the logistic fees for picking up return packages and the orders that customers do not accept
  • For customer returns, where customer opened the packet and after that he/she returns, Limeroad charges forward and reverse shipping, but no commission

But BI is standing by his claims. Here is Limeroad’s payment break-up as shared by seller BI:

“It is a simple thing that we have done business of 36 Lacs and received payment of 9 Lacs; then where is rest of the money,” asks BI.

Limeroad says the seller owes them over Rs. 2.6 lakhs

According to Limeroad, they are the first online platform to introduce ‘24-hours payment to the vendor’ to ensure that their best sellers can minimize their working capital requirements. So we asked them to explain the reason behind delayed payments, like it is in the case BI.

The marketplace turned the tables on the seller by saying that it is BI that owes them money, not the other way around.

Limeroad’s spokesperson reveals,

“This Seller Partner (BI) had sent 842 wrong products to our customers. Despite repeated training on how important quality adherence is, we were forced to levy a penalty for poor behaviour which we do across the board for all Seller Partners who send wrong products.  Once a Seller Partner fixes their quality issues, we not only stop the penalties, in most instances, if we see continued adherence, we reverse all their charges.”

“In this case, we do not owe any amount to the vendor. In fact, the vendor owes us INR 65,445+ penalty of INR 1,98,026 on account of sending wrong products to our customers. Sadly, the Seller Partner has been unresponsive on quality requests. As a result of which, we have been forced to decide not to work with him going forward,” adds the company’s representative.

    We asked the fashion etailer to share what these penalties and amount that the seller owes include. Limeroad says:

    • The amount of INR 65,445/- is the recoverable amount owing to the customer returns received after the payment for sales was made to the Seller Partner

    • The recoverable amount of INR 1,98,026/- is the penalty charged as per our Incentive and Penalty Programme which we launched in August 2016 for ensuring the quality of the products sent to our customers. This penalty is mainly for customer returns registered due to wrong, defective and damaged products that the Seller Partner sent to our customers.

    The Buy 1, Get 1 offer debacle

    Based on IOS’s interaction with BI, we think that the issue of ‘sending 842 wrong products’ mentioned above could have started with Limeroad’s Buy 1, Get 1 offer going wrong. Or at least is partially contributed to it.

    Here’s what happened as per BI – Limeroad drops an email to the seller to participate in ‘Buy 1, Get 1 offer’. Seller agrees. He dispatches the order as per the order invoices sent by Limeroad. Vendor notices that instead of 2 products per order (buy 1, get 1), there’s instruction to dispatch only 1. He informs the same to Limeroad; etailer says dispatch the orders according to the given invoice. Customer receives one product instead of two; returns it promptly stating, “Was under buy one get one but received only one”. Seller not only gets penalized for sending wrong (less) products but is also left with a huge pile of stock.

    IOS has reviewed email threads and other documents that back the claim that many customers received only 1 product, which led to high returns.

    IOS asked Limeroad,

    “For Buy 1, Get 1 deal, the seller alleges that Limeroad sent only 1 product to buyers instead of 2, which caused high returns. Any comment?”

    The company’s spokesperson replied,

    “As a part of the vendor policy, the Buy1Get1 offer explicitly needed customers to select 2 items of their own choice. Unless the customer identifies the second item we can’t send it. This is clearly communicated everywhere on the platform. We do know that some customers couldn’t understand this despite communications. Since mid-March we have taken a call to take the event down.”

    So you see, customers were at fault. Buyers didn’t understand how the BOGO offer works. But who paid the price (penalties)?

    Issues with Limeroad’s delivery partner

      Seller BI shared a host of issues that he is facing with Limeroad’s delivery partners. In particular, with Delhivery.  Some of them are:

      • No delivery attempt made
      • Packages sit at the courier partner’s warehouse, only to be returned to the seller after few days/weeks

      • Logistic companies that don’t deliver in certain areas are given the responsibility to deliver packages in unserviceable pincodes

      OS laid out these issues in front of Limeroad that says,

      “We only work with well-known logistic companies (Bluedart, Delhivery, Ecom Express and Aramax) and we are completely integrated with all of them. We track each and every package to make sure that there are no cases of ‘delivery not attempted’.”

      The spokesperson adds further,

      “No logistics company takes responsibility for pincodes it cannot serve. LimeRoad serves more than 19,000 pincodes and works with multiple courier companies… there is absolutely no upside for us to take any order that we cannot service simply because we don’t earn any commission, but sadly have to bear costs of to and fro of the package.”

      Valid point, right?

      But then we wonder why the ‘returns reason data sheet’, as written/communicated by buyers while returning/cancelling/rejecting order, shared by the seller list down the following reasons like:

      • Courier boy said (to customer) come and pick, he will not come to deliver (Delhivery)
      • Late delivery so cancelled (Bluedart)
      • No call or visit done by courier (Bluedart, Delhivery)
      • No service (Bluedart, Delhivery)

      It is not just one buyer who said that. A large number of buyers cancelled the order because Limeroad’s courier partner asked them to come and pick the order themselves.

      BI requested Limeroad to change the courier partner for his orders due to high returns, but nothing has been done so far on the front.

      The seller hopes that his association with Limeroad continues and that he gets his dues. But if the fashion etailer sticks to its version of the story then the seller is willing to take the legal route.

      Broche Impex has made some strong allegations against Limeroad. Just like few other sellers that had featured in this article, published in February 2017. And Limeroad denies all these allegations and believes that the seller’s poor performance and unresponsiveness to quality issues has earned him the penalties. In this Seller VS Etailer war, which side do you believe? Which team are you rooting for? Any Limeroad seller here who can share their two cents?

      Let us know through your comments

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