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.” 

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.

Get Our Best Stories!

Your Daily Dose of Our Top Tech News

Sign up for our What’s New Now newsletter to receive the latest news, best new products, and expert advice from the editors of PCMag.

Sign up for our What’s New Now newsletter to receive the latest news, best new products, and expert advice from the editors of PCMag.

By clicking Sign Me Up, you confirm you are 16+ and agree to our Terms of Use and Privacy
Policy.

Thanks for signing up!

Your subscription has been confirmed. Keep an eye on your inbox!

About Our Expert

Michael Kan

Senior Reporter

---

Experience

I’ve been a journalist for over 15 years. I got my start as a schools and cities reporter in Kansas City and joined PCMag in 2017, where I cover satellite internet services, cybersecurity, PC hardware, and more. I’m currently based in San Francisco, but previously spent over five years in China, covering the country’s technology sector.

Since 2020, I’ve covered the launch and explosive growth of SpaceX’s Starlink satellite internet service, writing 600+ stories on availability and feature launches, but also the regulatory battles over the expansion of satellite constellations, fights with rival providers like AST SpaceMobile and Amazon, and the effort to expand into satellite-based mobile service. I’ve combed through FCC filings for the latest news and driven to remote corners of California to test Starlink’s cellular service.

I also cover cyber threats, from ransomware gangs to the emergence of AI-based malware. Earlier this year, the FTC forced Avast to pay consumers $16.5 million for secretly harvesting and selling their personal information to third-party clients, as revealed in my joint investigation with Motherboard.

I also cover the PC graphics card market. Pandemic-era shortages led me to camp out in front of a Best Buy to get an RTX 3000. I’m now following how President Trump’s tariffs will affect the industry. I’m always eager to learn more, so please jump in the comments with feedback and send me tips.

Read Full Bio