Instacart pays $60 million to settle Federal Trade Commission allegations that it deceived consumers

Instacart will pay $60 million in refunds to settle allegations by the U.S. Federal Trade Commission that it deceived consumers with false advertising. The federal agency alleged that Instacart misled consumers using illegal tactics, causing them to pay higher fees while also denying refunds.

The FTC said Instacart’s claims of “free delivery” are misleading because customers are still required to pay a mandatory service fee, which can add up to 15% to their order total.

The agency also said that the delivery platform’s “100% satisfaction guarantee” promise is incorrect because it implies that it will offer full refunds when consumers are not completely satisfied with their orders, which typically does not happen when people receive late deliveries or unprofessional service.

Additionally, Instacart hid the refund option from the “self-service” menu that consumers use to report problems with their orders, causing people to believe they could only get a credit toward a future order instead of a refund, the FTC alleged.

Instacart also failed to clearly disclose terms related to the Instacart+ membership registration process, the agency said. The subscription service’s free trial sign-up process did not disclose that consumers would be charged once the trial ended, which allowed Instacart to charge people without their informed consent. Those consumers will receive refunds as a result of the settlement, the FTC said.

“The FTC is focused on monitoring online delivery services to ensure that competitors compete transparently on prices and delivery terms,” said Christopher Movrage, Director of the FTC’s Bureau of Consumer Protection. statement.

Instacart acknowledged the settlement in a Blog post He denied “any allegations of wrongdoing.” The company also said it believed “the basis for the FTC’s investigation was fundamentally flawed.”

Compromise comes as it does with Instacart Currently under fire More than a Recent study Which revealed that the AI-powered pricing tool was causing some customers to receive different prices for the same items in the same stores. Instacart responded to the controversy by saying that retailers set their prices themselves, and that any pricing tests done through its AI tool are random and not influenced by user data. Reuters reported on Wednesday The Federal Trade Commission (FTC) launched an investigation In the AI ​​pricing tool for the delivery platform.