Grocery delivery service Instacart has agreed to pay a substantial $60 million in customer refunds to settle allegations of deceptive practices brought by the US Federal Trade Commission (FTC). The settlement, announced on Thursday 18 December 2025, addresses claims of misleading advertising around delivery fees and free trials.
Core Allegations: Hidden Fees and Misleading Promises
The FTC's complaint centred on several key issues. Instacart was accused of falsely advertising 'free delivery' while failing to clearly disclose mandatory service fees. These fees, the regulator stated, could add up to 15% to an order's total cost and were a compulsory charge for customers to receive their groceries.
Furthermore, the FTC found that the company did not adequately inform customers enrolling in a free trial for its Instacart+ membership programme. Hundreds of thousands of users were automatically charged the $99 annual fee at the trial's end without receiving clear benefits or refunds. Instacart+ promises free delivery on most orders for members.
Another point of contention was Instacart's advertised "100% satisfaction guarantee." The FTC argued this was misleading, as customers experiencing problems like late deliveries were typically offered only a small credit for future orders, not a refund.
Company Response and Ongoing Pricing Probe
While agreeing to the settlement, Instacart denied any wrongdoing. In a statement, the San Francisco-based firm said it settled to move forward and focus on its business, asserting it offers a "transparent, affordable and consumer-friendly service" that exceeds industry norms.
This settlement is not the end of Instacart's regulatory challenges. The FTC has launched a separate investigation into the company's pricing practices. This probe follows a recent report by Consumer Reports and advocacy groups which found Instacart charged different prices for identical items, even for orders placed simultaneously at the same store.
The report suggested artificial intelligence tools might be used to inflate consumer costs. Instacart confirmed the FTC has requested information on its pricing tools and retailer practices. However, in a blog post, the company stressed it does not control base product prices, which are set by retailers who may test price sensitivity. Instacart also denied using shopper income, postcode, or history to set prices.
Implications for Market Transparency
Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection, emphasised the commission's focus on ensuring online delivery services compete transparently on price and terms. This case highlights growing regulatory scrutiny of digital platform practices, particularly around fee transparency and automated pricing algorithms.
The $60 million settlement fund is designated for customer refunds, marking a significant enforcement action in the gig economy sector. For UK consumers using similar services, it underscores the importance of scrutinising terms and conditions, especially regarding automatic subscription renewals and the full breakdown of fees.
