Instacart agrees to refund subscribers $60 million in FTC settlement

Instacart has reached an agreement to refund $60 million to its subscribers, as announced by the Federal Trade Commission (FTC) on Thursday. This decision comes in response to a lawsuit filed by the FTC, which accused the grocery delivery service of employing various illegal methods that negatively impacted consumers and drove up grocery costs for American shoppers. As part of the settlement, which lasts for a decade, Instacart has committed to halting the promotion of its app using misleading statements. Notably, the company had been advertising 'free delivery' when, in fact, customers were often subjected to 'service fees' that could reach up to 15%, fees that were not applied to pickup orders. The FTC pointed out that these service fees were essentially delivery charges disguised under another name. Moreover, the grocery delivery platform will no longer make claims about offering '100 percent satisfaction guaranteed.' This assertion suggested that customers could expect full refunds, yet the FTC found that many were instead given only minor credits for issues such as delayed deliveries or inadequate service. The complaint also noted that Instacart obscured the refund option in the 'self-service' menu, misleading consumers into believing that they were eligible only for credits toward future purchases rather than actual refunds. The FTC accused Instacart of retaining tens of millions of dollars by not fulfilling their promise of complete customer satisfaction. While the settlement will not provide refunds to all customers affected by these misleading claims, it will ensure that subscribers who were unaware they would be automatically charged after free trial periods will receive their reimbursements. The company is required to deposit the funds with the FTC within 14 days following the court's approval of the settlement.