Instacart settles with FTC over deceptive practices but still faces questions about pricing

Delivery company Instacart will pay $60 million in customer refunds under a settlement reached with the Federal Trade Commission (FTC) over alleged deceptive practices. The FTC said 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. Instacart 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. The 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. “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. Instacart denied the FTC’s allegations of wrongdoing but said it reached a settlement in order to move forward and focus on its business. “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. The settlement comes as Instacart is facing separate questions about its pricing practices. In December, 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. The report suggested that Instacart may be using artificial intelligence tools to drive up costs for consumers. This article was provided by The Associated Press.