Instacart has agreed to pay 60 million dollars in refunds to settle claims by the U.S. Federal Trade Commission that the company misled customers through deceptive advertising and unclear fees.
The FTC said Instacart used misleading tactics that caused people to pay more than they expected and made it difficult for them to receive refunds. One major issue involved Instacart’s “free delivery” claims. According to the agency, customers were still required to pay a mandatory service fee that could reach up to 15 percent of the total order, making the free delivery message misleading.
The agency also challenged Instacart’s “100 percent satisfaction guarantee.” The FTC said the promise suggested customers would receive full refunds if they were unhappy, but this usually did not happen in cases such as late deliveries or poor service.
Another concern was how refunds were handled inside the app. The FTC said Instacart removed the refund option from its self-service menu, which customers use to report problems. This made many people believe they could only receive credits for future orders instead of real refunds.
The FTC also said Instacart did not clearly explain the terms of its Instacart+ subscription. Customers who signed up for a free trial were not properly informed that they would be charged once the trial ended. As a result, some people were billed without fully understanding what they had agreed to. These customers will receive refunds as part of the settlement.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said the agency is closely watching online delivery services to make sure companies are competing fairly and clearly disclosing prices and delivery terms.
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Instacart confirmed the settlement in a blog post but denied any wrongdoing. The company said it believes the FTC’s investigation was based on flawed assumptions.
