Instacart settles with FTC over deceptive practices but faces separate investigation into prices
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Article contentDelivery company Instacart will pay $60 million in customer refunds under a settlement reached with the Federal Trade Commission over alleged deceptive practices.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe FTC said Thursday that Instacart has been falsely advertising free deliveries.
The San Francisco-based company isn’t clearly disclosing service fees, which add as much as 15% to an order and must be paid for customers to receive their groceries, the FTC said.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentInstacart has also failed to clearly disclose that customers who enroll in a free trial for its Instacart+ program will be charged membership fees at the end of the trial. The FTC said hundreds of thousands of customers have been charged but have received no benefits from memberships or refunds. Instacart+ offers members free deliveries on most orders for $99 per year.Article contentArticle contentThe FTC said Instacart also advertises a “100% satisfaction guarantee,” but customers who experience late deliveries or unprofessional service are typically only offered a small credit that can be used toward a future order and not a refund.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“The FTC is focused on monitoring online delivery services to ensure that competitors are transparently competing on price and delivery terms,” said Christopher Mufarrige, the director of the FTC’s Bureau of Consumer Protection.Article contentInstacart denied the FTC’s allegations of wrongdoing Thursday but said it reached a settlement in order to move forward and focus on its business.Article content“Instacart is proud to offer a transparent, affordable and consumer-friendly service. 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 said in a statement.Article contentThe settlement comes as Instacart is facing a separate probe by the FTC into its pricing practices.Article contentEarlier this month, a report by Consumer Reports and two progressive advocacy groups — Groundwork Collaborative and More Perfect Union — found that Instacart charged different prices for the same grocery items even though online shoppers were filling their Instacart baskets at the same time and at the same stores.Article contentArticle contentThe report suggested that Instacart may be using artificial intelligence tools to drive up costs for consumers. Instacart confirmed Thursday that the FTC has requested information on its pricing tools and the pricing practice of the retailers it works with.Article contentIn its own blog post Thursday, Instacart stressed that it isn’t a retailer and doesn’t control base prices listed on its website. It said retailers often test prices in order to see how sensitive consumers are when prices go up or down, and that’s what was happening in Consumer Reports’ case.Article contentInstacart also said the company and its retailers don’t use information about shoppers’ income, zip code or shopping history to set prices.Article contentInstacart said it encourages retailers to charge the same amount on its website as they charge for in-store shoppers. Some retailers, including Lowe’s, Ulta Beauty and Best Buy, already do that, Instacart said, but many others don’t.Article contentTrending Tax Court overturns CRA decision to deny bitcoin loss writeoff Taxes Philip Cross: The sad story of Justin Trudeau’s 'youthful idiots' FP Comment Posthaste: Here's where home prices plunged the most in tough year for Canada's housing market News Welcome to the K-shaped economy: Canadians look back on a 'brutal,' 'great' year in Trump's trade war Economy Amid a wave of mortgage renewals, borrowers will have leverage in 2026 Mortgages Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Tax Court overturns CRA decision to deny bitcoin loss writeoff Taxes Philip Cross: The sad story of Justin Trudeau’s 'youthful idiots' FP Comment Posthaste: Here's where home prices plunged the most in tough year for Canada's housing market News Welcome to the K-shaped economy: Canadians look back on a 'brutal,' 'great' year in Trump's trade war Economy Amid a wave of mortgage renewals, borrowers will have leverage in 2026 Mortgages