David Bridges
Key Points
- Program Ending: Instacart is discontinuing a pricing program that showed different prices for the same items.
- Customer Impact: The decision affects how customers perceive prices on the platform.
- Refunds: Instacart will pay $60 million in refunds to settle allegations of deceptive practices.
- Trust Issues: The company aims to restore customer trust by eliminating price-testing services.
Instacart said Monday (Dec. 22) that it’s ending a program where some customers saw different prices, per Associated Press. The catch was that those prices were for the same product ordered at the same time from the same store when using the app.
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Wait, What Happened?
The program was designed to help grocers and other retailers understand the types of prices customers are willing to pay. It’s similar to how stores offer different prices for the same products at different locations. However, a report from Consumer Reports and two progressive advocacy groups, Groundwork Collaborative and More Perfect Union, raised concerns. Their report found that Instacart offered nearly three out of every four grocery items to shoppers at multiple prices in an experiment.
Additionally, Instacart stated that these services were not “dynamic pricing,” a system where the price for an item can increase when demand is high. The services also were not “surveillance pricing,” where prices can be set based on a user’s income, shopping history or other personal information. Instead, the company said it was offered to customers at random.
Some customers would see a slightly higher price for an item, while others would see a somewhat lower price. The report, for example, found that Instacart customers saw one of five different prices for the same dozen Lucerne eggs from a Safeway store in Washington, D.C.: $3.99, $4.28, $4.59, $4.69, or $4.79.
What Does This Mean For Instacart?
Retailers will continue to set their own prices on the delivery website and they may still offer different prices at different brick-and-mortar locations, Instacart said. However, “from now on, Instacart will not support any item price testing services.”
“At a time when families are working exceptionally hard to stretch every grocery dollar, those tests raised concerns, leaving some people questioning the prices they see on Instacart,” the company said in a Monday blog post. “That’s not okay – especially for a company built on trust, transparency, and affordability.”
Instacart had been offering the price-testing service to retailers since 2023. The company declined to say how many customers may have been affected. But, it will end the service, effective immediately.
Company Will Pay $60 Million In Customer Refunds
In a separate case, Instacart agreed to pay $60 million in customer refunds to settle federal allegations of deceptive practices. The Federal Trade Commission had accused Instacart of falsely advertising free deliveries and not clearly disclosing service fees. Those fees add as much as 15% to an order and customers must pay them. Instacart denied FTC allegations of wrongdoing. Also, it said it reached a settlement in order to move forward and focus on its business.
“Trust is earned through clarity and consistency,” Instacart said in its blog post Monday. “Customers should never have to second-guess the prices they’re seeing.”
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What Do You Think Roomies?
