Instacart will pay $60 million in refunds to customers following allegations that the grocery delivery platform used deceptive practices that inflated costs and enrolled users in unwanted paid subscriptions.
The Federal Trade Commission announced the settlement Thursday, Dec. 18, saying Instacart misled consumers by advertising “free” delivery while still charging mandatory fees and by failing to issue proper refunds.
According to regulators, Instacart also enrolled shoppers in its Instacart+ subscription program without clear or informed consent.
“Instacart misled consumers by advertising free delivery services — and then charging consumers to have groceries delivered — and failing to disclose to consumers that signed up for a free trial that they would be automatically enrolled into its subscription program,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. He added that the agency is closely monitoring online delivery services to ensure transparent pricing and fair competition.
The FTC said Instacart promoted “free delivery” on first orders while charging service fees that could add up to 15% to the total bill. These fees were often not clearly disclosed during checkout.
Instacart was also accused of falsely advertising a “100% satisfaction guarantee.” Customers who experienced late deliveries or poor service were frequently offered small credits rather than full refunds. Refund options were reportedly buried in the app’s self-service menu, leading many users to believe credits were their only option.
In addition, hundreds of thousands of customers were charged for Instacart+ memberships without receiving benefits or refunds. The FTC said the free trial failed to clearly disclose automatic enrollment after the trial ended or that refunds were limited.
Instacart acknowledged the settlement but denied the FTC’s allegations.
“We flatly deny any allegations of wrongdoing by the agency, and we believe the foundation of the FTC’s inquiry was fundamentally flawed,” the company said in a blog post. “We stand firmly behind the integrity, transparency, and value of our programs. This settlement allows us to move forward and remain focused on delivering value for our customers, shoppers, and retail and brand partners.”
Under the settlement, Instacart must stop misrepresenting delivery costs and satisfaction guarantees. The company is also required to clearly disclose subscription terms and obtain express, informed consent before charging customers.
The agreement marks the latest FTC action targeting deceptive subscription practices. Earlier this year, the agency sued Uber over allegations it charged users for Uber One subscriptions without consent. In September, the FTC accused Ticketmaster and Live Nation Entertainment of working with brokers to resell tickets at inflated prices. The agency has also announced plans to distribute $27.6 million to more than 1.2 million consumers unknowingly charged for weight-loss and skincare plans.
The $60 million settlement comes amid renewed scrutiny of Instacart’s pricing practices. A recent report found that secret price tests may have caused some customers to pay more for identical groceries. According to the report, AI-powered dynamic pricing increased prices by as much as 23% between two shoppers, with differences ranging from 7 cents to $2.56 per item.
The FTC is currently investigating Instacart’s use of AI-driven pricing tools.