Instacart settled with the Federal Trade Commission for $60 million to resolve an FTC action that accused the grocery delivery company of deceiving customers about fees, refunds, and terms of its subscriptions.
The money will be used for consumer restitution. Although Instacart did not admit wrongdoing, the settlement highlights increasing regulatory scrutiny of digital marketplaces for “free” offers, dark patterns, and opaque pricing.
What the FTC Alleges About Instacart’s Fees and Refunds
Regulators said the company’s “free delivery” claim was deceptive because orders nonetheless included a compulsory service fee that could hike prospective totals by as much as 15%. In practice, however, consumers who thought they could receive a zero-fee drop-off ended up paying additional fees that did not appear prominently with the free-delivery language for three months beginning in 2018, the agency’s complaint and order said.
The agency also attacked Instacart’s “100% satisfaction guarantee,” saying the promise suggested full refunds for problems like missing items, late drop-offs, or bad service when, in fact, many customers ended up receiving credits instead of cash back. The self-service support flow obscured or minimized the option to request a refund and in effect nudged users toward accepting account credit by default, investigators said.
The FTC also said Instacart did not adequately disclose that a free trial of its Instacart+ membership would be converted into a paid subscription, whose charges were unknowingly incurred. The settlement applies to customers charged after trial periods for subscriptions for which the terms of renewal were not disclosed.
How the $60M Redress Will Reach Consumers
The FTC said that the affected consumers would receive refunds associated with those practices, including fees related to “free delivery,” credits offered instead of a refund, and post-trial membership charges.
The agency usually makes payments by either check, prepaid card, or a digital transfer and contacts eligible consumers directly with the information it received during its investigation. Consumers do not have to pay to access these funds.
For Instacart, the payment is a meaningful amount as well as a reputational signal. Refund programs make clear which practices regulators deemed misleading — and frequently they lead to overhauls of design for checkout flows, available disclosures, and customer support paths.
Dark Patterns And Subscription Traps In Online Checkouts
The case comes against the backdrop of a wider crackdown on so-called junk fees and dark patterns — design techniques that hide costs or nudge users into decisions they might not otherwise make. The FTC has also provided guidance on negative-option billing and brought several subscription cases that emphasize clear, up-front disclosure of a purchase or recurring charges and simple ways to cancel (“click-to-cancel”). Companies that tout “free” or “guaranteed” benefits under generous-sounding names, while burying mandatory fees or constraints like refund limits, are now well in regulators’ sights.
Other delivery and gig platforms have faced similar criticism. Recent enforcement actions have forced firms to clarify tipping policies, fix “free” claims that omit mandatory fees, and unify communication across apps and websites so the advertised price and the terms of refund are consistent throughout the checkout experience.
AI Pricing Tool Draws New Scrutiny From Regulators
The settlement comes as Instacart has grappled with scrutiny of its AI-powered pricing tests. Some shoppers were quoted different prices on the same items at the same stores, according to a study cited by the researchers. The FTC is investigating the platform’s AI pricing tool, according to Reuters. Retailers set their own prices and any tests are random rather than aimed at individuals, Instacart says.
Where the new settlement homes in on disclosures and refunds, the parallel AI review is part of a broader regulatory trend: dynamic pricing and algorithmic experiments need to be balanced with clear, accurate consumer information. Obscure testing can appear to be unfair or deceptive, especially if it results in blind or variegated costs.
What It Means for Shoppers and Platforms
Consumers’ immediate takeaway is simple: Look for notices about the refund process from the FTC and check Instacart account settings, like terms on renewal of Instacart+. When you check out, seek out clear line-item explanations of delivery, service, and regulatory fees and utilize support flows that clearly show cash-refund options when orders go awry.
For Instacart and its peers, the message is more sweeping. Marketing statements such as “free delivery” and “100 percent satisfaction” must match the bill and the resolution. They should be impossible not to notice, not impossible to locate. And as AI transforms pricing and promotions, transparency will matter as much as the algorithms themselves.