Instacart to Pay $60 Million in FTC Settlement Over Consumer Deception Claims
Instacart has agreed to pay $60 million in consumer refunds to resolve allegations brought by the U.S. Federal Trade Commission (FTC), which accused the grocery delivery platform of misleading customers through deceptive advertising and unclear subscription practices.
The settlement addresses a range of claims related to pricing transparency, refund policies, and membership disclosures, as regulators continue to increase scrutiny of online delivery services.
FTC Alleges Misleading “Free Delivery” Advertising
According to the FTC, Instacart’s promotion of “free delivery” was deceptive because customers were still required to pay a mandatory service fee, which could increase the total cost of an order by up to 15%.
The agency argued that these fees were not clearly communicated, leading consumers to believe they were paying less than they actually were at checkout.
“100% Satisfaction Guarantee” Called Into Question
The regulator also challenged Instacart’s “100% satisfaction guarantee,” stating that the promise implied customers would receive full refunds if they were unhappy with their orders.
In practice, the FTC said, refunds were typically not provided in cases involving late deliveries or unprofessional service, making the guarantee misleading to consumers.
Refund Options Allegedly Hidden From Customers
Another key allegation focused on how Instacart handled customer complaints. The FTC claimed the company removed the refund option from its self-service support menu, leading customers to believe that store credit was the only resolution available for order issues.
This design choice, the agency said, discouraged consumers from requesting cash refunds they were entitled to receive.
Instacart+ Trial Sign-Ups Under Scrutiny
The settlement also covers concerns about Instacart’s Instacart+ subscription service. The FTC stated that the free trial sign-up process failed to clearly disclose that customers would be charged automatically once the trial ended.
As a result, some users were billed without informed consent. The FTC confirmed that affected consumers will receive refunds as part of the settlement.
FTC Emphasizes Transparency in Online Delivery Services
Commenting on the case, Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, said:
“The FTC is focused on monitoring online delivery services to ensure that competitors are transparently competing on price and delivery terms.”
Instacart Denies Wrongdoing
Instacart acknowledged the settlement in a company blog post but denied “any allegations of wrongdoing.” The firm added that it believes “the foundation of the FTC’s inquiry was fundamentally flawed.”
Despite the settlement, Instacart has not admitted liability.
AI Pricing Tool Faces Separate Investigation
The agreement comes at a time when Instacart is also facing scrutiny over a recent study alleging its AI-powered pricing tool results in different customers seeing different prices for identical items at the same stores.
Instacart responded by stating that retailers control their own pricing and that any pricing experiments conducted through its AI system are random and not influenced by user data.
However, Reuters reported that the FTC has now opened an investigation into Instacart’s AI pricing tool, signaling continued regulatory attention.
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