Instacart to pay $60 million in refunds after feds allege it deceived customers

"Instacart has agreed to refund $60 million to customers to settle allegations that the grocery shopping service engaged in deceptive marketing and billing practices, the Federal Trade Commission said Thursday. The agency alleged in a lawsuit that Instacart charged hidden fees and refused to issue refunds, raising the cost of groceries for consumers and harming shoppers."

""Instacart misled consumers by advertising free delivery services - and then charging consumers to have groceries delivered - and failing to disclose to consumers that signed up for a free trial that they would be automatically enrolled into its subscription program," Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said in a statement. The FTC said Instacart's promise of free delivery to shoppers placing an order through the platform for the first time amounted to false advertising because the offer required that they pay a "service fee" to receive their groceries."

"Instacart also failed to stand behind its "100% satisfaction guarantee" because it implied that it offered full refunds for dissatisfied customers, which the company failed to provide. Instead, customers whose orders were late or incomplete only received a small credit to use on a future order. Instacart denied the FTC's allegations, telling CBS News in a statement that the company provides "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.""

The Federal Trade Commission alleged that Instacart charged hidden fees, refused refunds, and engaged in deceptive marketing and billing practices that increased grocery costs for consumers. The FTC said promises of free delivery were false because a service fee was required, and free-trial users were automatically enrolled into subscription programs without clear disclosure. Regulators also alleged that the company failed to honor a "100% satisfaction guarantee," issuing small credits instead of full refunds for late or incomplete orders. Instacart denied the allegations, asserted compliance with laws and industry norms, and agreed to a $60 million customer refund settlement.

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