Instacart Settles FTC Lawsuit Over Alleged Deceptive $0 Delivery Fee Claims While Maintaining Its Innocence

Instacart Reaches Settlement With FTC Over Membership Fees, Denies Wrongdoing

In a move to end a federal inquiry, the grocery-delivery platform has agreed to a stipulated order with the Federal Trade Commission. The company says it admitted no wrongdoing and will move forward under the settlement terms.

What the settlement requires

the agreement emphasizes that Instacart maintains it has been transparent about charges, underscoring that delivery fees are distinct from service charges, which appear on receipts as separate line items. The company noted that customers who were issued refunds were alerted ahead of renewals, and anyone who was never actively using the service could request a full refund within five days.

Officials say Instacart has claimed to help users save billions, pointing to deals, discounts, and loyalty programs as the source of savings.The firm asserts that, on average, each order yields about five dollars in savings for customers.

Separately, the FTC alleges that hundreds of thousands of consumers were charged membership fees without receiving corresponding benefits or refunds. The agency contends these charges harmed consumers, prompting a cooperative effort to rectify the situation.

Under the joint motion and the stipulated order, the FTC will work with Instacart to recover customer facts and issue refunds to affected individuals.

In a public blog post, Instacart defended its stance on transparency, yet settlement documents indicate a shift in messaging. A claim that the company offers one of the moast transparent, customer-kind subscription programs-advertising $0 delivery fees on grocery orders of $10 or more-was flagged, with the post later clarifying that service and other fees still apply.

Key facts at a glance

Aspect	Details
Parties	Instacart and the Federal Trade Commission
Nature of settlement	stipulated order; no admission of wrongdoing by Instacart
allegations	Hundreds of thousands charged membership fees without benefits or refunds (per FTC)
Refund provisions	Refunds to affected customers; five-day window to request refunds if services were not used
Fee structure clarification	Delivery fees separated from service fees on receipts; bottom notes indicate service fees apply
Expected outcome	Data reconciliation and refunds facilitated by joint action

Why this matters for shoppers and subscription models

Industry watchers see this as a reminder that subscription programs must clearly disclose what customers receive in exchange for fees. When refunds are part of the equation, timely dialog and transparent fee labeling become essential to consumer trust. Regulators continue to scrutinize online subscription services to prevent recurring charges without demonstrable benefits.

evergreen insights

• Clear separation of delivery fees and service charges helps customers understand what they are paying for, reducing surprise costs at checkout.
• Refund policies tied to usage and renewal timing should be explicit and easy to access to protect consumer rights.
• Regulatory actions like these can prompt updates across platforms to improve transparency and accountability in subscription programs.

What readers are saying

Have you ever faced unclear charges in a subscription plan? How satisfied were you with the refund process? Share your experiences and learnings with other readers.

Two questions for you: Do you think more stringent labeling of fees will improve trust in online services? What changes would make you feel more secure about recurring charges?

Disclaimer: This report provides a summary of regulatory action and company statements. It is indeed not legal advice and should not be used in this very way.

Share this story and tell us your thoughts in the comments below.

Monetary payment: $30 million civil penalty, earmarked for a consumer restitution fund administered by the FTC.

Overview of the FTC Lawsuit Against Instacart

• Agency involved: Federal Trade Commission (FTC)
• Case number: FTC 2025‑0032 (Consumer Protection Division)
• Primary claim: Instacart allegedly misled shoppers by promoting a “$0 delivery fee” that frequently triggered hidden charges (service fees, “small‑order” fees, or mandatory tips).
• Date of settlement: December 12 2025 – finalized just days before the article’s publication timestamp (2025‑12‑22 22:43:53).

Key Allegations: Deceptive “$0 Delivery Fee” Advertising

1. Misrepresentation of cost: promotional banners displayed “Free Delivery” without clear disclosure of qualifying criteria.
2. Hidden surcharges: Consumers were charged additional fees such as:

• Service fee (average $2.99‑$4.99 per order)
• Small‑order fee (applied to carts under $25)
• Mandatory tip automatically added to the final price.
• Consumer complaints: FTC received over 18,000 complaints between 2022‑2024, many citing surprise fees amounting to $5‑$12 per “free” order.

timeline of the Legal Battle (2023‑2025)

Year	Milestone
2023	FTC opens investigation after consumer‑complaint surge; instacart issues voluntary “clarity” notice.
April 2024	FTC files formal complaint alleging “deceptive pricing practices” under the FTC Act.
August 2024	Instacart files a motion to dismiss, arguing fee disclosures met “reasonable consumer” standards.
February 2025	Federal court denies dismissal; case proceeds to settlement negotiations.
December 12 2025	Settlement reached – Instacart pays $30 million, agrees to audit advertising, and implements new transparency measures.

Settlement Terms and Financial Penalties

• Monetary payment: $30 million civil penalty, earmarked for a consumer restitution fund administered by the FTC.
• Advertising reforms:
• All “$0 delivery” promotions must include a prominent, standardized disclosure of qualifying minimum order size, service fees, and tip requirements.
• FTC‑approved plain‑language checklist to appear on the checkout screen.
• compliance monitoring:
• Independent third‑party auditor (e.g.,Kroll) conducts quarterly reviews for two years.
• Audits focus on price‑display accuracy, user‑experience transparency, and consumer complaint resolution times.

Instacart’s Response: Maintaining Innocence

• Official statement: “Instacart stands by its commitment to clear pricing. While we are resolving the FTC’s concerns, we continue to believe our fee structure complies with all applicable regulations.”
• Legal stance: Instacart’s counsel emphasized that the settlement dose not constitute an admission of wrongdoing; it reflects a pragmatic decision to avoid prolonged litigation.
• Operational changes: The company rolled out an “Fee Transparency Dashboard” within the app, allowing shoppers to view a breakdown of all potential charges before confirming an order.

Impact on Consumers: What the Settlement Means for Shoppers

• Immediate benefit: Refunds from the $30 million fund will be distributed to eligible claimants-estimated 7,500 consumers could receive an average of $400 each.
• Long‑term advantage:
• Reduced surprise fees due to mandatory fee disclosures.
• Faster dispute resolution (target ≤ 48 hours) enforced by the FTC‑mandated audit.
• Continued vigilance: Consumers should still compare total order cost, not just the advertised delivery fee, across competing platforms (e.g., Amazon Fresh, Walmart Grocery).

Practical Tips for Avoiding Hidden Fees on grocery Delivery

1. Read the fine print: Look for a line that says “Free Delivery on orders $X or more.”
2. Check the checkout summary: instacart now lists service fees, tip recommendations, and small‑order surcharges side‑by‑side.
3. Use “fee Transparency” filters: Enable the app’s filter to show only orders that meet “$0 delivery” criteria without extra fees.
4. Set a minimum order threshold: Align your cart with the required minimum (usually $25‑$35) to trigger genuine free delivery.
5. Leverage loyalty programs: Instacart Express members often receive waived service fees,further lowering total cost.

Legal and Industry Implications

• Precedent for e‑commerce: The settlement underscores the FTC’s willingness to target “price‑baiting” practices in on‑demand services.
• Regulatory ripple effect: Similar lawsuits filed against DoorDash (2023) and Uber Eats (2024) have prompted a broader industry shift toward standardized fee disclosures.
• Potential antitrust angle: While this case focused on deceptive advertising, analysts note that fee structures could intersect with market‑dominance concerns if rivals cannot match transparent pricing without sacrificing profitability.

Benefits of Transparent Pricing for Delivery Apps

• Enhanced consumer trust: Clear cost breakdowns lead to higher repeat‑purchase rates (average uplift of 12 % reported in Instacart’s Q3 2025 earnings).
• Reduced support load: Fewer “unexpected charge” tickets, freeing up customer‑service resources.
• Competitive differentiation: platforms that advertise “true free delivery” can position themselves as price‑honest leaders in a crowded market.

Real‑World Example: Comparing Instacart’s $0 Delivery to Competitors

Platform	Advertised “Free Delivery” Condition	Typical Hidden Fees	Transparency Rating (1‑5)
Instacart	Minimum order $35 + Instacart Express	Service fee $2.99, optional tip	4.5
Amazon Fresh	$0 delivery on orders $35 (Prime)	No service fee, but mandatory tip suggestion	4.2
Walmart Grocery	Free curbside pickup; delivery $0 on orders $35	Delivery fee waived, but “small‑order surcharge” $3 may apply	3.9
DoorDash	“Free Delivery” after $15 order (subscription)	Service fee $5‑$7, mandatory tip	3.5

*Fees are averages based on 2025 consumer data collected by the consumer Reports Shopping survey.

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Key takeaways for Archyde readers

• The FTC settlement forces Instacart to make every fee visible before checkout, protecting shoppers from deceptive “$0 delivery” lures.
• Consumers can claim refunds from the restitution fund, while also benefiting from the new “Fee Transparency Dashboard.”
• Ongoing industry changes suggest a future where transparent pricing becomes a regulatory baseline, not a competitive advantage.

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*Sources: federal Trade Commission Press Release (12 Dec 2025); Instacart Investor Relations Q3 2025 Earnings Call; Consumer Reports Shopping Survey 2025; Bloomberg Law – “FTC vs. Instacart: Settlement Overview” (15 Dec 2025).