Instacart to refund shoppers $60M for "free delivery" fees, FTC says

Instacart will be forced to reimburse $60 million to shoppers after an FTC investigation determined the online grocery platform deceptively charged users for delivery fees, even though it advertised the service as free.

The US Federal Trade Commission announced the deceptive practices settlement, accusing the e-commerce giant of slew of unlawful tactics the consumer watchdog says “harmed American shoppers and raised the cost of grocery shopping.”

The most significant allegation in the FTC complaint, filed Thursday, states that Instacart advertised “free delivery” to consumers on their first order on its website – but still required new users to pay a mandatory “service fee” to get their groceries delivered.

Those mandatory service fees would typically increase the cost of those grocery orders by about 15%, the FTC said.

“Instacart misled consumers by advertising free delivery services – and then charging consumers to have groceries delivered, said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection.

FTC cites more deceptive practices

Mufarrige also noted that the company failed to disclose to consumers who signed up for a free Instacart+ trial that they “would be automatically enrolled into its subscription program at the end of their trials.”

Allegedly, the "largest online grocery marketplace in North America" charged “hundreds of thousands of consumers for paid memberships without their express informed consent.”

Furthermore, the FTC says Instacart's “restrictive refund policy” would refuse to reverse the charges, leaving consumers “without receiving benefits from the membership or getting refunds.”

Finally, the federal agency claims that Instacart “falsely advertised a ‘100% satisfaction guarantee,’ leading consumers to believe they would be provided full refunds if requested.

Users who reported“late deliveries or unprofessional service” were only offered a “small credit” toward future orders and were simply not even offered a refund.

The FTC says Instacart hid its refund option from the “self-service menu” used to report problems, causing many shoppers to “erroneously believe” their only option was to accept that small credit.

Instacart denies accusations

Established in 2012, the San Francisco-headquartered e-commerce platform touts more than 25 million users, with nearly 250 million orders in the first three quarters of 2025 alone, according to the Instacart website.

Instacart has denied any allegations of wrongdoing, but says it has agreed to the settlement so it can continue to focus on shoppers and retailers.

"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," an Instacart spokesperson said in a statement.

However, Instacart's questionable practices do not just stop at deceptive marketing.

Earlier this week, the FTC launched a separate investigation into the delivery service's new application, Eversight, an AI pricing tool the watchdog says has resulted in widely varying item prices for individual shoppers, in some cases raising prices in shopping carts by a whopping 23%.

Under the proposed FTC settlement order, Instacart will be barred from misleading consumers about delivery costs and satisfaction guarantees.

Additionally, the company will also be required to clearly disclose subscription terms and get explicit consent before charging customers who don’t opt out.

“The FTC is focused on monitoring online delivery services to ensure that competitors are transparently competing on price and delivery terms,” Mufarrige said.

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