Instacart to Pay $60 Million in Consumer Refunds to Settle FTC Deception Case

Key Takeaways

• $60 Million in Refunds: Instacart will pay $60 million to consumers to resolve FTC allegations of deceptive practices.
• Misleading “Free Delivery” Claims: The FTC alleged that Instacart advertised free delivery while charging undisclosed mandatory service fees of up to 15 percent.
• Refund Practices Scrutinized: Regulators said Instacart steered consumers toward credits instead of refunds and obscured refund options.
• Subscription Consent Failures: Hundreds of thousands of consumers were allegedly enrolled in paid Instacart+ memberships without express informed consent.
• Stricter Disclosure Requirements: The settlement requires clear disclosures and affirmative consent for subscription enrollments.

Deep Dive

Instacart has agreed to pay $60 million in consumer refunds to settle a lawsuit brought by the Federal Trade Commission, which alleged that the grocery delivery platform used deceptive advertising, improper subscription practices, and unlawful refund processes that raised costs for shoppers.

Under the proposed settlement, Instacart will be required to halt the practices identified by the FTC and refund consumers who were charged for its Instacart+ subscription without their express informed consent. The agreement resolves allegations that the company misrepresented delivery costs, failed to provide promised refunds, and automatically enrolled consumers into paid subscriptions following free trials without adequate disclosure.

“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,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. He added that the agency is closely monitoring online delivery services to ensure transparent competition on pricing and delivery terms.

Alleged Deceptive Practices

According to the FTC’s complaint, Instacart falsely advertised “free delivery” for first-time orders while still charging mandatory service fees that could add up to 15 percent to the total cost. The agency alleged these fees were not clearly disclosed to consumers at the time they were promised free delivery.

The FTC also took issue with Instacart’s “100% satisfaction guarantee,” which it said implied full refunds for dissatisfied customers. In practice, the agency alleged that consumers experiencing late deliveries or unprofessional service were typically offered small credits toward future orders rather than refunds. The FTC further alleged that Instacart hid refund options from the self-service menu used to report order issues, leading many consumers to believe credits were the only available remedy.

In addition, the FTC alleged that Instacart failed to clearly disclose key terms of its Instacart+ subscription. The agency said the company’s free-trial enrollment process did not adequately inform consumers that they would be charged at the end of the trial or explain Instacart’s restrictive refund policy. As a result, hundreds of thousands of consumers were allegedly charged membership fees without receiving benefits or refunds.

Under the proposed order, Instacart is prohibited from misrepresenting delivery costs and satisfaction guarantees. The company must also clearly and conspicuously disclose subscription terms and obtain express informed consent before enrolling consumers in any program that results in automatic charges unless they actively opt out.

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