Instacart ordered to refund $60 million to customers in FTC settlement over hidden fees and subscription traps

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Instacart denies the FTC's allegations

Instacart
(Image credit: SOPA Images / Getty)

Instacart will pay $60 million in refunds to settle the Federal Trade Commission's allegations that it deceived customers with false advertising and shady tactics in its subscription sign-up process. A recent FTC lawsuit accused the grocery delivery company of charging hidden fees and refusing to issue refunds. Instacart lured first-time shoppers with the promise of "free delivery services" that amounted to a free trial of its paid subscription service, the lawsuit claims.

"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 this week.

Instacart also advertised a “100% satisfaction guarantee,” implying that anyone who had a problem with their order was entitled to a full refund. In practice, however, the company didn't make this easy, apparently:

How to receive your Instacart settlement refund

A screenshot of Instacart's site on desktop.

(Image credit: Sharaf Maksumov)

As part of the settlement, Instacart will issue refunds to customers who were charged for Instacart Plus without their informed consent. It’s still unclear how those refunds will go out or when Instacart users can expect them. The agreement also requires Instacart to stop the deceptive practices outlined in the lawsuit, according to a news release.

If it goes anything like the recent $1.5 billion Amazon Prime settlement, you can likely expect the latest updates about eligibility requirements and a payment timeline to hit whatever inbox you have associated with your Instacart account. In Amazon's case, the company promised to automatically issue some customers refunds within 90 days of the settlement. Others were sent claim forms via email to complete and submit within 180 days, with refunds arriving 30 days after approval. We should hear more about Instacart's timeline in the coming months.

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Alyse Stanley
Alyse Stanley
News Editor

Alyse Stanley is a news editor at Tom’s Guide, overseeing weekend coverage and writing about the latest in tech, gaming, and entertainment. Before Tom’s Guide, Alyse worked as an editor for the Washington Post’s sunsetted video game section, Launcher. She previously led Gizmodo’s weekend news desk and has written game reviews and features for outlets like Polygon, Unwinnable, and Rock, Paper, Shotgun. She’s a big fan of horror movies, cartoons, and roller skating. She's also a puzzle fan and can often be found contributing to the NYT Connections coverage on Tom's Guide

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