Grocery delivery company Instacart has agreed to pay $60 million in consumer refunds following allegations by the Federal Trade Commission (FTC) that it used deceptive practices that harmed shoppers and increased grocery costs. The settlement, announced by the FTC, requires Instacart to stop these practices and provide refunds to consumers who were charged for Instacart+ memberships without their clear consent.
According to Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, “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.” He added, “The FTC is focused on monitoring online delivery services to ensure that competitors are transparently competing on price and delivery terms.”
The FTC alleged several deceptive tactics by Instacart. The company advertised “free delivery” for first orders but required customers to pay a mandatory service fee not clearly disclosed at checkout. These fees could add up to 15% more to the total order cost.
Instacart also promoted a “100% satisfaction guarantee,” suggesting full refunds for dissatisfied customers. However, many consumers only received small credits toward future orders instead of full refunds. The option for requesting a refund was hidden from the self-service menu, leading customers to believe credits were their only recourse.
Additionally, the FTC found that Instacart did not clearly inform users signing up for an Instacart+ free trial that they would be automatically charged membership fees after the trial ended or about its restrictive refund policy. As a result, hundreds of thousands of people were charged without giving informed consent and often did not receive benefits or refunds.
Under the proposed settlement order, Instacart must refrain from making misleading statements about delivery costs and satisfaction guarantees. The company is also required to clearly disclose all terms and obtain explicit consent before enrolling customers in subscription programs where automatic charges occur unless users opt out.
The FTC’s commission vote on the final order was unanimous at 2-0. The proposed order has been filed in the U.S. District Court for the Northern District of California and will become legally binding if approved by a judge.
The FTC continues its work promoting competition and protecting consumers from unfair business practices.
