How ONDC Seller Apps Handle Returns, Logistics & Grievances: A Deep Dive into IGM and RSF
Introduction: The Hidden Backbone of ONDC
India's Open Network for Digital Commerce (ONDC) gets talked about mostly for its promise — democratising e-commerce, breaking Amazon and Flipkart's dominance, and bringing lakhs of kirana stores online. But behind every product listing and every order placed across Paytm, PhonePe Pincode, Meesho, or Magicpin lies an infrastructure that very few sellers truly understand: how returns are processed, how logistics are managed, how grievances are resolved, and how money actually reaches a seller's bank account.
This blog breaks down exactly that — the operational machinery powering ONDC seller apps, with a specific focus on two frameworks that form its backbone: the Issue & Grievance Management (IGM) system and the Reconciliation & Settlement Framework (RSF).
Section 1: The Scale That Makes All This Matter
Before getting into the mechanics, it is worth understanding the scale at which these systems operate.
Section 2: The Unique Challenge ONDC Faces with Returns & Grievances
On a traditional marketplace like Amazon, one company controls the buyer experience, seller dashboard, logistics, and payments. When something goes wrong, accountability is clear.
ONDC is fundamentally different. A single transaction on ONDC involves at least three distinct, independent entities:
When a buyer receives a damaged product, who is responsible — the seller app that listed it, the logistics provider that delivered it, or the buyer app through which the complaint was raised?
This "unbundled architecture" is ONDC's greatest strength (it enables open competition) but also its hardest operational challenge. The IGM framework was specifically designed to solve this problem.
Section 3: How Returns Work on ONDC Seller Apps
Returns on ONDC are not handled centrally. Each seller app has its own returns workflow, but all must comply with ONDC's network-level policies.
3.1 The General Return Flow
Buyer raises return → Buyer App captures the request →
Seller App notified → Seller evaluates eligibility →
Logistics assigned for reverse pick-up →
Item inspected → Refund or replacement initiated →
RSF processes the financial settlement
3.2 Return Policy Variations Across Seller Apps
Different seller apps enforce different return windows and policies. Here is a comparison:
Key Insight for Sellers: Under ONDC, if a return or RTO (Return to Origin) occurs, the seller bears the logistics cost. This is a critical difference from platforms like Flipkart or Meesho where return shipping may be subsidised.
3.3 Refund Timelines
Based on network-level expectations and user reports from 2025, refunds on ONDC typically take 2–3 business days for prepaid orders, routed back through the payment gateway (e.g., Razorpay for many seller apps). COD orders require manual reconciliation, which may take longer.
Section 4: Logistics on ONDC — How It Actually Works
Logistics on ONDC is not centralised. It is a marketplace within a marketplace.
4.1 How Logistics Gets Assigned
When a buyer places an order:
4.3 The Delivery Consistency Challenge
As of 2025, delivery in metro areas has reached near-parity with traditional e-commerce at 24–48 hours, while Tier 2/3 cities can see delays of 1–3 days longer than platforms like Amazon or Flipkart. Real-time tracking is improving but still inconsistent across some LSPs — a known gap ONDC is actively working to close.
Section 5: The IGM Framework — ONDC's Grievance Architecture
5.1 What Is IGM?
The Issue & Grievance Management (IGM) framework is ONDC's structured, network-wide mechanism for resolving disputes and complaints. It went live officially on September 1, 2023, integrating an Online Dispute Resolution (ODR) mechanism directly into the network.
The framework covers three categories of issues:
5.2 The Three-Level Escalation Structure
IGM operates on a strictly time-bound, three-tier escalation model:
🔵 Level 1 — Interfacing App Resolution (Automated)
The complaint is raised through the buyer's or seller's interfacing app. The Grievance Redressal Officer (GRO) of that app evaluates whether the issue falls within their liability.
Every Network Participant (NP) must have a designated GRO, as mandated by the Consumer Protection (E-Commerce) Rules, 2020. ONDC maintains a registry of all GROs.
🟡 Level 2 — Inter-NP GRO Resolution
When the interfacing app cannot resolve the issue, GROs from the respective Network Participants (buyer app, seller app, and LSP) collaborate to determine liability and reach a resolution. ONDC's leadership may be consulted for guidance.
This level involves structured data points:
🔴 Level 3 — Online Dispute Resolution (ODR)
If Levels 1 and 2 fail to resolve the grievance, the issue moves to an ODR Service Provider. Three mechanisms are available:
At Level 3, evidence is transferred directly from the Network Participants to the ODR Service Provider — the goal is eventually fully automated, without manual intervention.
Unresolved after ODR? The only remaining path is litigation — but ONDC's framework is designed specifically to prevent cases from reaching this stage.
5.3 IGM in Practice — What Sellers Need to Know
5.4 Why IGM Matters for Seller Credibility
A seller's complaint resolution record on ONDC directly influences their discoverability and trust score. Poor grievance performance can result in:
Section 6: The RSF — How Money Flows on ONDC
6.1 The Problem RSF Solves
Before RSF, buyer apps were manually settling payments to seller apps via bank portals. This required beneficiary addition, manual entries, and had no regulated oversight — leading to delays, errors, and disputes that eroded seller trust.
The Reconciliation & Settlement Framework (RSF) — now in its version 2.0 — was built to automate and secure this entire flow.
RSF 2.0 was developed by Protean eGov Technologies in collaboration with NPCI Bharat BillPay Limited (NBBL), launched in June 2023. It is now mandatory for all Network Participants under Clause 1.2.2 of the ONDC Network Policy.
6.2 The Actors in RSF
6.3 A Real-Money Example of How RSF Works
Let's say Buyer App X and Seller App Y complete two transactions of ₹2,000 each, with a commission of ₹500.
Step-by-step settlement:
6.4 Benefits of RSF 2.0 for Sellers
6.5 NOCS — The Platform Powering RSF
The underlying technology platform for RSF is NOCS (NBBL Online Commerce Services), which:
Section 7: How RSF and IGM Work Together
RSF and IGM are not independent — they are complementary frameworks that together form ONDC's trust infrastructure.
ORDER PLACED
↓
Transaction-Level Contract created
↓
ORDER DELIVERED
↓
RSF initiates settlement process
↓
[If dispute arises] ──────────────→ IGM Level 1 triggered
↓
Resolved? → RSF adjusts settlement
↓ (if not)
IGM Level 2 (GRO resolution)
↓ (if not)
IGM Level 3 (ODR)
↓
Binding resolution → RSF executes corrected settlement
In practice, this means:
Section 8: Key Challenges That Still Exist
Despite the robustness of these frameworks, real-world implementation still has friction points:
1. Return Policy Inconsistency: Not all seller apps enforce uniform return policies. Some smaller vendors lack clear return or warranty commitments, eroding buyer trust.
2. Tracking Gaps: Real-time parcel tracking is still inconsistent across LSPs. Buyers sometimes see "in transit" status even after delivery.
3. Decentralised Customer Service: Customer service on ONDC is forwarded to the seller — there is no centralised helpdesk like Amazon's customer care. This creates variable service quality.
4. Tier 2/3 Delivery Lag: Delivery in less dense geographies remains 1–3 days slower than traditional e-commerce, partly due to logistics partner coverage gaps.
5. IGM Automation Pending: As of now, Level 3 ODR still involves some manual process. Fully automated ODR integration is in progress.
Section 9: What This Means for Sellers — A Practical Checklist
If you are a seller on ONDC or considering joining, here is what you must ensure:
✅ Understand your return policy obligations — Set clear return windows in your seller app dashboard; you bear reverse logistics costs for returns and RTOs.
✅ Know your GRO — Your seller app has a Grievance Redressal Officer. Know who they are and what escalation channels exist.
✅ Register with RSF 2.0 — Ensure your seller app is compliant with RSF 2.0 and integrated with NBBL's NOCS platform for timely payouts.
✅ Choose your LSP wisely — Pick a logistics provider with strong PIN code coverage in your primary markets; delivery failures directly impact your IGM score.
✅ Document everything — The IGM process is evidence-driven. Maintain records of dispatch, packaging, and communication for every order.
✅ Monitor your settlement cycle — With RSF 2.0, understand your settlement timelines with your seller app to manage working capital effectively.
Conclusion: Infrastructure That Earns Trust
ONDC's vision of democratising e-commerce will ultimately be measured not just by how many sellers it onboards, but by how reliably it handles the messiest part of commerce — things going wrong.
The IGM framework, with its time-bound three-level escalation and ODR integration, gives buyers and sellers a structured path to resolution without courts or platform arbitrariness. The RSF 2.0, backed by NPCI Bharat BillPay and operating under RBI guidance, provides the financial integrity that makes sellers trust the network with their revenue.
Together, they represent something rare in Indian e-commerce: a publicly designed, protocol-governed operating layer that is open, auditable, and not owned by any single commercial player. For sellers, understanding these frameworks is not just academic — it is the difference between a smooth operation and a cash-flow nightmare.
Sources: ONDC Official Blog, ONDC GitHub, Protean eGov Technologies, NBBL NOCS, Inc42, McKinsey & Company, Economic Times, Vikra Blog, Medianama, Wikipedia — ONDC.
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