Instacart ends program showing different prices for the same item

Instacart said on Monday (Dec. 22) it was ending a program in which some customers saw different prices, by Associated Press. The problem is that these 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. This is similar to how stores offer different prices for the same products in different locations. However, a report from Consumer Reports and two progressive advocacy groups, Groundwork Collaborative and More Perfect Union, have raised concerns. Their report found that Instacart offered nearly three out of four grocery items to shoppers at multiple prices as part of an experiment.

Additionally, Instacart said these services do not constitute “dynamic pricing,” a system in which the price of an item can increase when demand is high. The Services also did not constitute “monitoring pricing,” where prices could be set based on a user’s income, purchase history, or other personal information. Instead, the company said it was offered to customers randomly.

Some customers would see a slightly higher price for an item, while others would see a slightly lower price. The report, for example, reveals that Instacart customers saw one of five different prices for the same dozen Lucerne eggs at 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 will still be able to offer different prices depending on physical locations, Instacart said. However, “Effective now, Instacart will not support any item price testing services.”

“At a time when families are working extremely hard to save every grocery dollar, these tests have raised concerns, leaving some people questioning the prices they see on Instacart,” the company said in a blog post Monday. “This is not acceptable, especially for a company built on trust, transparency and affordability.”

Instacart had offered the price testing service to retailers since 2023. The company declined to say how many customers might have been affected. But this will terminate the service, effective immediately.

The company will pay $60 Million In Customer Refunds

In a separate case, Instacart agreed to pay $60 million in refunds to customers to settle federal allegations of deceptive practices. The Federal Trade Commission had accused Instacart of falsely advertising free deliveries and failing to clearly disclose service fees. These fees add up to 15% to an order and customers must pay them. Instacart has denied the FTC’s allegations of wrongdoing. Furthermore, he said he reached an agreement in order to move forward and focus on his business.

“Trust is earned through clarity and consistency,” Instacart said in its blog Monday. “Customers should never have to question the prices they see.”

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