Instacart is discontinuing a program that showed different prices for the same products to customers, following criticism about a lack of transparency and fairness. The company said the program aimed to help retailers understand customer price sensitivity. The program was criticized for possibly exploiting customers and creating confusion. Instacart clarified that retailers can still set their prices and offer different prices at different physical locations. The company stated the testing was random and not based on dynamic or surveillance pricing.
Instacart said Monday that it’s ending a program where some customers saw different prices for the same product ordered at the same time from the same store when using the delivery company’s service.The program was meant to help grocers and other retailers learn more about what kinds of prices customers would pay for items, similar to how stores offer different prices for the same products at different locations.
But it raised alarms after a report from Consumer Reports and two progressive advocacy groups, Groundwork Collaborative and More Perfect Union, said Instacart offered nearly three out of every four grocery items to shoppers at multiple prices in an experiment.RELATED STORY | Same groceries, same store: So why did you pay more than your neighbor?“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.”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, but “from now on, Instacart will not support any item price testing services.”Instacart said these services were neither “ dynamic pricing,” a system where the price for something can go up when demand is high, nor “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 simply see a slightly higher price for an item, while others would see a slightly lower price. The experiment by Consumer Reports and the two progressive advocacy groups, for example, found that Instacart customers saw one of five different prices for the same dozen of Lucerne eggs from a Safeway store in Washington, D.C.: $3.99, $4.28, $4.59, $4.69, or $4.79.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.RELATED STORY | Why Instacart is expected to send $60 million in refunds to customersLast week, 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, which add as much as 15% to an order and must be paid for customers.Instacart denied FTC allegations of wrongdoing and 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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