San Francisco, California, December 19, 2025
Instacart has reached a $60 million settlement to refund consumers following allegations of deceptive advertising practices related to free delivery claims and hidden service fees. The Federal Trade Commission (FTC) raised concerns over the company’s pricing strategies and transparency, leading to an investigation. The settlement highlights the importance of honesty in marketing, with the need for businesses to build trust with consumers. Instacart must now cease misleading practices and offer refunds to affected customers, reinforcing the message that consumer protection is crucial in tech-driven service industries.
San Francisco, California
Instacart Agrees to $60 Million Settlement Over Deceptive Practices
Instacart has agreed to pay $60 million in refunds to consumers to settle allegations of deceptive advertising practices, including misleading claims of free delivery and undisclosed service fees. The Federal Trade Commission (FTC) also raised concerns about the company’s pricing practices, prompting further investigation.
With the rise of technology-driven services like grocery delivery, consumer protection remains a pivotal concern. In this instance, Instacart’s substantial settlement underscores the importance of transparency and honesty in marketing. As entrepreneurs continue to innovate and provide much-needed services, it is essential that they foster trust and demonstrate integrity to capture the loyalty of their customers. Reducing regulatory burdens can encourage more small businesses to thrive, leading to enhanced economic growth and consumer choice.
Settlement Details
The FTC alleged that Instacart falsely advertised “free delivery” for first-time orders, while still charging mandatory service fees of up to 15% of the order cost. Additionally, the company failed to clearly disclose that customers enrolling in free trials for its Instacart+ program would be automatically charged membership fees at the end of the trial period. Hundreds of thousands of consumers were charged without receiving benefits or refunds. Instacart also promoted a “100% satisfaction guarantee,” but customers who experienced issues like late deliveries or unprofessional service were typically offered only small credits toward future orders, not full refunds. Under the settlement, Instacart is required to cease these deceptive practices and provide refunds to affected consumers.
Pricing Practices Under Scrutiny
Separately, the FTC is investigating Instacart’s pricing practices, particularly its use of the Eversight pricing tool. A study revealed significant price discrepancies, with some shoppers paying up to 23% more for identical items at the same store and time. Instacart maintains that it does not control product prices and that pricing tests are random and not based on user data. The company emphasizes that retailers are responsible for setting prices and encourages them to align online and in-store pricing.
Market Impact
Following the announcement of the settlement, Instacart’s stock experienced a decline of nearly 2%. The company’s shares closed at $44.95, down $0.70 from the previous close.
Background
Instacart, founded in 2012, is a San Francisco-based grocery delivery and pickup service operating across the United States and Canada. The company partners with various retailers to provide customers with a wide selection of products delivered to their doorstep. The recent settlement with the FTC addresses concerns over the company’s advertising and subscription practices, as well as its pricing strategies.
Conclusion
Instacart’s $60 million settlement serves as a stark reminder of the need for clear and honest communication between businesses and their consumers. For any entrepreneurial venture, establishing trust is vital for long-term success. As the San Antonio business community evolves, it is crucial for local entrepreneurs to prioritize transparency and accountability in their practices. Supporting small businesses committed to ethical practices will further strengthen our local economy and foster community growth.
Frequently Asked Questions (FAQ)
What deceptive practices did Instacart engage in?
Instacart falsely advertised “free delivery” for first-time orders while charging mandatory service fees of up to 15%. The company also failed to disclose that customers enrolling in free trials for its Instacart+ program would be automatically charged membership fees at the end of the trial period. Additionally, Instacart’s “100% satisfaction guarantee” often resulted in small credits toward future orders instead of full refunds for service issues.
What is the Eversight pricing tool, and why is it under investigation?
The Eversight pricing tool is used by Instacart to conduct randomized pricing tests for retailers. A study revealed significant price discrepancies, with some shoppers paying up to 23% more for identical items at the same store and time. The FTC is investigating these practices to determine if they are deceptive or unfair.
How has the settlement affected Instacart’s stock?
Following the announcement of the $60 million settlement, Instacart’s stock declined by nearly 2%, closing at $44.95, down $0.70 from the previous close.
What is Instacart’s response to the allegations?
Instacart denies any allegations of wrongdoing and emphasizes its commitment to transparent marketing, pricing, and customer service. The company stated that the settlement allows it to focus on delivering value to customers, shoppers, and retail partners.
What is the background of Instacart?
Instacart, founded in 2012, is a San Francisco-based grocery delivery and pickup service operating across the United States and Canada. The company partners with various retailers to provide customers with a wide selection of products delivered to their doorstep. The recent settlement with the FTC addresses concerns over the company’s advertising and subscription practices, as well as its pricing strategies.
Key Features
| Feature | Description |
|---|---|
| Settlement Amount | $60 million in consumer refunds |
| Deceptive Practices | False advertising of “free delivery,” undisclosed service fees, misleading “100% satisfaction guarantee,” and automatic enrollment in paid memberships |
| Pricing Tool Under Investigation | Eversight pricing tool, with concerns over significant price discrepancies among shoppers |
| Stock Impact | Instacart’s stock declined by nearly 2% following the settlement announcement |
| Company Response | Instacart denies allegations of wrongdoing and emphasizes commitment to transparent marketing and customer service |
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