Instacart to Refund $60 Million Following FTC Probe Into Alleged Deceptive Practices

Instacart has agreed to issue $60 million in refunds to consumers as part of a settlement resolving a Federal Trade Commission investigation into what the agency characterized as “numerous unlawful tactics” employed by the grocery delivery platform. The settlement stems from allegations that the company engaged in deceptive marketing and subscription practices that misled customers about delivery costs and enrolment terms.

In parallel, the FTC has requested additional information from Instacart regarding the company’s use of artificial intelligence in its pricing systems, according to reports. The inquiry follows heightened scrutiny sparked by a recent Consumer Reports investigation, which found that a pricing initiative allowing retailers on Instacart to test different prices could potentially cost shoppers up to $1,200 more per year for groceries. The program enables short-term pricing experiments, raising concerns about fairness and transparency in how prices are presented to consumers.

Instacart strongly disputed Consumer Reports’ conclusions. “Consumer Reports’ claim that a typical family is spending $1,200 more on groceries as a result of these short-term, randomized pricing tests is completely wrong and frankly outrageous,” the company said. Instacart argued that the analysis was based on flawed assumptions, stating that Consumer Reports extrapolated annual spending from a single, atypical shopping basket created during a limited-time test.

The company also sought to clarify the nature of its pricing experiments, which are conducted through its Eversight platform. Instacart emphasized that the tests are not examples of dynamic pricing or surveillance pricing, contrary to some public characterizations. According to the company, it does not rely on personal consumer data such as income level, ZIP code, or shopping history to charge higher prices for specific products.

Consumer Reports published a detailed account of its findings as part of a broader investigation into grocery pricing practices, building on earlier reporting focused on Kroger. The issue has since drawn political attention. Last week, U.S. Sen. Chuck Schumer (D-N.Y.) sent a letter to FTC Chairman Andrew Ferguson urging the agency to examine multiple aspects of Instacart’s pricing tests.

Separately, in announcing the settlement related to deceptive practices, the FTC accused Instacart of making misleading advertising claims and of enrolling customers in its Instacart+ subscription service without obtaining proper 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.

Instacart rejected the FTC’s allegations in their entirety. “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,” an Instacart spokesperson told SN. “We flatly deny any allegations of wrongdoing by the Federal Trade Commission, and we stand firmly behind the integrity and transparency 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 in the communities we serve.”

Among the practices cited by the FTC was Instacart’s promotion of free delivery for first-time orders while still charging a service fee that could increase the total cost by as much as 15%. The agency also challenged Instacart’s use of a “100% satisfaction guarantee,” arguing that it was deceptive because dissatisfied customers were not provided full refunds, but instead received what the FTC described as a “small credit” toward a future purchase.

Instacart responded to these claims in a blog post disputing the FTC’s assertions, stating that service fees are clearly disclosed and explained as separate from delivery fees. The company maintained that its pricing and fee structures are transparent and communicated to consumers before checkout.

Under the terms of the proposed settlement order, Instacart will be barred from misrepresenting delivery costs or satisfaction guarantees. The agreement also requires the company to clearly and prominently disclose subscription terms and to obtain express informed consent from consumers before enrolling them in subscription services that involve automatic charges unless the consumer actively opts out.

By fLEXI tEAM