(RTTNews) - The Federal Trade Commission or FTC announced that grocery delivery provider Instacart will pay $60 million in refunds to consumers to settle allegations that the company engaged in deceptive practices that harmed shoppers and increased grocery costs.
Under the proposed settlement order, Instacart must cease these practices and provide refunds to consumers who were charged for Instacart+ memberships without their informed consent.
According to the FTC, Instacart misled consumers by advertising "free delivery" on first orders while still imposing mandatory service fees that added up to 15% of the order cost. These fees were not clearly disclosed, undermining the company's claims of free delivery.
The FTC also alleged that Instacart falsely promoted a "100% satisfaction guarantee," suggesting full refunds for unsatisfactory service. In practice, consumers often received only small credits toward future orders, and the refund option was hidden from the self-service menu, leaving many unaware that they could request actual refunds.
Additionally, Instacart failed to adequately disclose terms related to its Instacart+ membership program. Consumers who signed up for free trials were automatically enrolled in paid memberships without clear notice, and many were charged fees without receiving benefits or refunds.
Under the settlement, Instacart is prohibited from misrepresenting delivery costs or satisfaction guarantees. The company must also clearly disclose subscription terms and obtain express informed consent before charging consumers for memberships or services that renew automatically.
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