Instacart, the popular grocery delivery service, has terminated a contentious pricing programme that resulted in customers seeing different prices for identical items ordered at the same time from the same store. The company announced the immediate end to the practice following significant public scrutiny and a damning investigation by consumer advocates.
What the Consumer Report Revealed
The decision to halt the programme came swiftly after a report from Consumer Reports, alongside advocacy groups Groundwork Collaborative and More Perfect Union. Their experiment found that Instacart presented nearly three out of every four grocery items at multiple prices. In one stark example, a dozen Lucerne eggs from a Safeway in Washington, D.C., were shown to customers at one of five different price points: $3.99, $4.28, $4.59, $4.69, or $4.79.
In a blog post addressing the controversy, Instacart stated: "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. That’s not okay – especially for a company built on trust, transparency, and affordability."
Not Dynamic Pricing, But Randomised Tests
The programme, which began in 2023, was initially framed as a tool to help partner grocers understand customer price sensitivity, similar to how physical stores might vary prices between locations. Instacart was keen to clarify that this was not "dynamic pricing" (where costs fluctuate with demand) nor "surveillance pricing" (based on personal data). Instead, the company insisted prices were offered randomly, leading to the inconsistent figures seen by shoppers.
Despite this clarification, the lack of transparency provoked alarm. Instacart has now confirmed that "from now on, Instacart will not support any item price testing services." While individual retailers will retain control over setting their own prices on the platform, the company-wide testing mechanism has been shut down. Instacart declined to reveal how many of its users were affected by the scheme.
A Broader Context of Scrutiny and Settlement
This development follows closely on the heels of a separate legal challenge for the company. Just last week, Instacart agreed to pay $60 million in customer refunds to settle federal allegations of deceptive practices brought by the Federal Trade Commission (FTC). The FTC had accused the firm of misleading customers with false advertisements for free delivery and failing to adequately disclose service fees, which could add up to 15% to an order's total. Instacart denied any wrongdoing in that case, stating the settlement was reached to allow the business to move forward.
Concluding its blog post, Instacart emphasised its commitment to rebuilding confidence: "Trust is earned through clarity and consistency. Customers should never have to second-guess the prices they’re seeing." The company's swift reversal underscores the intense pressure on digital platforms to maintain fair and transparent pricing for consumers, particularly amidst a continuing cost-of-living crisis.
