Instacart, a grocery delivery service, has agreed to refund $60 million following allegations from the FTC that it misled consumers with deceptive advertising and inappropriately enrolled them in paid subscriptions.

With partnerships involving over 1,800 retailers, Instacart facilitates online shopping, delivery, and pickup from nearly 100,000 locations across North America. The platform serves millions of users and is utilized by around 600,000 independent shoppers in cities throughout Canada and the U.S.

A complaint lodged by the FTC on Thursday accused Instacart of employing various misleading tactics that resulted in heightened costs for consumers, including failure to honor advertised refunds and misrepresenting “free delivery” while charging mandatory service fees that could inflate order totals by up to 15 percent.

The FTC noted that issues arose from Instacart’s claim of a “100% satisfaction guarantee,” as it generally provided only limited credits toward future orders instead of full refunds to customers facing delivery problems. Furthermore, the company allegedly obscured refund options within “self-service” menus, misleading customers into thinking credits were their only recourse.

Furthermore, the FTC contended that users enrolling in a free trial for the Instacart+ membership program were not adequately informed that they would be automatically billed once the trial concluded.

This lack of transparency resulted in hundreds of thousands of customers incurring membership fees without receiving benefits or obtaining refunds, according to the FTC’s allegations.

Instacart misled consumers by advertising free delivery—and then imposing charges for grocery delivery. Additionally, those who signed up for a free trial were not informed that they would automatically transition into a subscription program. The FTC remains vigilant in reviewing online delivery services to ensure fair pricing and delivery terms in the competitive market. — Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection.

Per the proposed order, Instacart is mandated to halt all deceptive practices and transparently disclose the terms of its subscription services. The FTC stated that all users charged for Instacart+ memberships without prior consent will receive refunds.

While Instacart has settled the FTC’s allegations of deceptive practices, it is under investigation for its pricing strategies. A report from consumer advocacy groups including Groundwork Collaborative, Consumer Reports, and More Perfect Union revealed that Instacart charged varying prices for identical products across multiple online shoppers at the same stores.

In response, Instacart clarified that these price fluctuations were part of short-term, randomized A/B testing intended to gauge consumer sensitivity to pricing on certain items.

Moreover, the company denied allegations of setting prices based on individual customer data or manipulating base prices, stating that each retail partner maintains complete control over pricing.

“Instacart is committed to offering a transparent, affordable, and consumer-friendly service. We prioritize clear marketing, straightforward pricing, transparent fees, uncomplicated terms, easy cancellation, and generous refund policies—fully compliant with legal standards and exceeding industry norms,” a spokesperson for Instacart said to BleepingComputer.

“We categorically reject any claims of wrongdoing put forth by the Federal Trade Commission. This settlement allows us to proceed and focus on delivering value to our customers, shoppers, and retail and brand partners within the communities we serve.”

Update December 19, 08:52 EST: Added statement from Instacart.

Broken IAM is not just an IT issue; it affects your entire business.

This practical guide outlines the deficiencies of traditional IAM practices in meeting modern needs and provides examples of effective IAM strategies along with a checklist for establishing a scalable solution.

Get the guide