Instacart To Refund $60 Million Over Deceptive Delivery, Subscription Tactics

Instacart has agreed to refund $60 million to users who were charged for supposedly free delivery services.

The refunds are part of a settlement with the US Federal Trade Commission, which alleges Instacart used a variety of deceptive tactics to make consumers think the company’s grocery delivery services were free. In reality, many users were forced to pay extra, with the fees hidden until checkout or added under a different name, the US regulator argued in a complaint.

“Instacart’s claims of ‘free delivery’ are false because consumers still must pay a mandatory ‘service fee’ to get their groceries delivered,” the agency added. “These mandatory service fees add as much as 15% to the order cost and were not clearly disclosed to consumers.”

The FTC also says the company failed to disclose important details about the paid Instacart+, subscription program, which offers free delivery but still includes some service fees. The company offered free trials for the program, but allegedly failed to disclose to users that they would be automatically charged for a membership once the trial ended.

“As a result, Instacart has charged many consumers for paid memberships without their express informed consent,” the Commission says. “Hundreds of thousands of consumers have been charged membership fees without receiving benefits from the membership or getting refunds.”

According to the settlement, which was filed with the US District Court for the Northern District of California, the FTC will deposit the $60 million into a fund that will be distributed to affected consumers. Details about who qualifies and how to get a cut has not yet been announced.

The regulator also flagged Instacart for failing to offer full refunds for late deliveries or bad service when it was advertising a “100% satisfaction guarantee.”

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Under the deal, Instacart “neither admits nor denies any of the allegations in the Complaint,” but the company has agreed to cease the deceptive marketing tactics. In a blog post, Instacart denied the FTC’s allegations, saying: “We stand firmly behind the integrity, transparency, and value of our programs.”

“We provide straightforward marketing, transparent pricing and fees, clear terms, easy cancellation, and generous refund policies – all in full compliance with the law and exceeding industry norms,” the company claimed. “This settlement allows us to move forward and remain focused on delivering value for our customers, shoppers, and retail and brand partners in the communities we serve.”

Regulatory troubles for the San Francisco company might not be over. The FTC is reportedly investigating Instacart for also using an AI tool to show different prices for the same items.