Instacart agrees to refund subscribers $60 million in FTC settlement

"The app defended its "$0 delivery fees" claim by reminding customers that "we clearly and consistently distinguish delivery fees from service fees, which are always shown as a separate, itemized line." Instacart also noted that subscribers receiving refunds were sent email reminders before renewals were charged. Further, any subscriber shocked by the charges had five days to request an automatic full refund if services were never used, the company said. Boasting that Instacart has helped users save more than $3 billion "through deals, discounts, and loyalty programs," the company estimated that users weren't harmed by its practices and, on average, save $5 for each order."

""We flatly deny any allegations of wrongdoing by the agency, and we believe the foundation of the FTC's inquiry was fundamentally flawed," the company said. The FTC, however, alleged that "hundreds of thousands of consumers have been charged membership fees without receiving benefits from the membership or getting refunds." Defending Instacart users from an alleged "variety of deceptive tactics," the FTC will now work with Instacart to retrieve customer information and issue refunds, a jointly filed order detailing the settlement said."

"In its blog, Instacart repeatedly claimed to be transparent and clear with customers about charges. But in a sign that the settlement is already forcing changes, a claim that the company provides "one of the most transparent, customer-friendly subscription programs available, unlocking $0 delivery fees ongrocery orders of $10 or more" was starred. At the bottom of the blog, the company clarified that "service and other fees apply.""

Instacart admitted no wrongdoing and agreed to a settlement to move forward while denying allegations. The company defended its "$0 delivery fees" claim by stating that delivery fees are distinct from service fees and that service fees are itemized separately. Instacart said subscribers receiving refunds were reminded by email before renewals and that subscribers had five days to request full automatic refunds if services were unused. Instacart reported users saved over $3 billion through deals and estimated average savings of $5 per order. The FTC alleged hundreds of thousands were charged membership fees without benefits or refunds and will work with Instacart to retrieve customer data and issue refunds.

Read at Ars Technica