A district consumer disputes redressal commission has ruled against online baby products retailer FirstCry, directing the company to pay ₹50,000 as compensation, refund ₹2,130 with interest, and bear ₹5,000 in litigation costs — after it emerged that the platform had secretly labelled a customer a fraudster, cancelled his order without warning, and withheld his money without due process.
The case dates to December 2024, when Shaik Altaf placed an order for a children's tricycle on FirstCry's platform and made a payment of ₹2,130.06 via PhonePe. Within 24 hours of placing the order, it was cancelled — without any reason being communicated to Altaf. What made matters worse was that his payment was not refunded either.
When Altaf reached out to the company's customer care, he was told that the amount had been unilaterally adjusted against a dispute stemming from a prior transaction in FY23-24. According to FirstCry, Altaf had allegedly returned incorrect products during that earlier transaction to fraudulently claim a refund while keeping the original items. Altaf categorically denied this, noting that the return had been processed only after the company's own pickup and warehouse quality verification procedures had been completed — in accordance with FirstCry's stated policies. He also pointed out that at no point had he received any communication — written, verbal, or electronic — informing him of such an allegation.
What came to light during the commission proceedings was particularly damaging for FirstCry. The platform had internally tagged Altaf's recent order as a 'fraud user order cancel' in its system — effectively branding him a fraudster — without conducting any investigation, issuing a notice, or granting him any opportunity to respond. The commission took serious exception to this, noting that such a step directly affected the customer's dignity and reputation.
The commission's scrutiny of FirstCry's defence revealed a fundamental contradiction. The company had itself acknowledged before the National Consumer Helpline that refunds for the FY23-24 transaction had already been processed following due verification. Yet, in the same breath, it sought to use alleged fraud in that very transaction to justify withholding Altaf's payment for an entirely new purchase. The commission found this untenable, observing that once a refund is issued after proper verification, it is not open to a company to retroactively allege wrongdoing in the same transaction and use it as a basis to penalise the customer in a subsequent, unrelated transaction.
The commission also took note of an attempt at out-of-court settlement. FirstCry's representative had reportedly contacted Altaf on three separate occasions after the complaint was filed, offering a total settlement of ₹2,190 as refund and ₹15,000 as compensation. While this was not treated as a formal admission of liability, the commission interpreted it as a clear indicator that the company was well aware its position was legally untenable.
FirstCry also attempted to distance itself from the transaction by claiming that the order in question had been placed not by Altaf but by another individual named Sameer Basha Bamri. The commission rejected this argument outright. Altaf had produced payment records and order details that conclusively established his direct connection to the transaction. The document that FirstCry submitted in support of its alternative claim was found to be illegible and therefore unreliable.
In its final ruling, the commission found that FirstCry's conduct — cancelling the order arbitrarily, withholding the refund, taking contradictory positions, and marking the transaction as a fraud order without following any due process — collectively constituted both a deficiency in service and an unfair trade practice under consumer protection law.
The commission directed FirstCry to refund ₹2,130 with interest at 9% per annum from 1 December 2024, until the date of actual realisation. In addition, the company was ordered to pay ₹50,000 as compensation for the mental agony caused to Altaf, along with ₹5,000 towards his litigation costs. All payments are to be made within 45 days. The commission also directed the retailer to take concrete steps to curb such unfair trade practices going forward — a signal that the ruling carries implications beyond this individual case.
