Instacart hit with $60 million fine for hidden fees and subscription traps

Maplebear Inc., operating as Instacart, agreed to pay $60 million to settle Federal Trade Commission allegations that the grocery delivery platform deceived consumers through false advertising about free delivery, misleading satisfaction guarantees, and unauthorized subscription charges. The settlement, filed December 18, 2025, in the U.S. District Court for the Northern District of California, addresses violations of the Federal Trade Commission Act and the Restore Online Shoppers' Confidence Act.

According to the stipulated order, Instacart falsely advertised "free delivery" to consumers on first orders while simultaneously charging mandatory service fees that added as much as 15% to order costs. The company failed to clearly disclose these fees to consumers, effectively rendering the free delivery promise illusory. These mandatory service fees were not classified as government charges and directly contradicted Instacart's promotional messaging.

The FTC investigation found that Instacart marketed a "100% satisfaction guarantee" that suggested consumers would receive full refunds when dissatisfied with service. Court documents reveal that consumers experiencing late deliveries or unprofessional service typically received only small credits toward future orders rather than full refunds. The company concealed the refund option from the self-service menu that consumers used to report order problems, leading many to erroneously believe they could only receive credits toward future purchases rather than actual refunds.

Between 2013 and 2019, Instacart operated an Instacart+ membership program with enrollment practices that violated federal consumer protection standards. The free-trial enrollment process failed to adequately disclose that consumers would be charged for memberships at the end of trial periods. The company also did not clearly communicate its restrictive refund policy during the enrollment process. As a result, hundreds of thousands of consumers were charged membership fees without providing express informed consent, and many never received benefits from the membership or obtained refunds.

The settlement imposes permanent restrictions on Instacart's business practices going forward. The company cannot misrepresent the total amount consumers will pay for delivery services or falsely claim that delivery is free when other mandatory fees apply. Instacart must clearly and conspicuously disclose any fees beyond government charges whenever it advertises free delivery or discounted delivery offers. The order defines "clearly and conspicuously" to mean disclosures that are easily noticeable, difficult to miss, and easily understandable by reasonable consumers.

For any goods or services advertised with satisfaction guarantees or money-back guarantees, Instacart must clearly disclose all material restrictions, limitations, or conditions that apply. The company cannot misrepresent whether refunds are available or impose limitations on consumers' ability to obtain full refunds. Before providing any refund, credit, or similar remedy under a guarantee, Instacart must disclose information about each type of remedy available and how consumers can obtain them.

The settlement addresses negative option features, which are provisions where a customer's silence or failure to take affirmative action to reject services is interpreted as acceptance. Instacart must obtain consumers' express informed consent before charging them for any service with negative option features. The company must clearly and conspicuously disclose all material terms before obtaining billing information, including that consumers will be charged for services, deadlines to prevent charges, and the amount and frequency of charges unless consumers take steps to stop them.

Christopher Mufarrige, who leads the FTC's consumer protection work, stated that the agency is focused on monitoring online delivery services to ensure transparent competition on price and delivery terms. An Instacart spokesperson said the company flatly denies any allegations of wrongdoing but that the settlement allows focus on shoppers and retailers. The spokesperson claimed Instacart provides straightforward marketing, transparent pricing and fees, clear terms, easy cancellation, and generous refund policies that comply with the law and exceed industry norms.

The settlement arrives as Instacart faces additional regulatory scrutiny over pricing practices. A separate FTC investigation examines the company's Eversight pricing tool following a study by nonprofit groups showing individual shoppers simultaneously received different prices for identical items at the same stores. The agency has demanded information about Instacart's pricing methodology. Instacart maintains that retailers are responsible for setting prices and that any testing conducted through Eversight represents randomized A/B testing rather than dynamic or surveillance-based pricing. The company says prices do not change in real time, are not tied to supply and demand, and are not based on personal or behavioral data.

U.S. Representative Robert Garcia of California requested information from Instacart CEO Chris Rogers about how prices are set, expressing concern that algorithm-driven pricing could worsen financial pressure on consumers. The pricing investigation follows the company's 2022 acquisition of Eversight, an AI-based pricing and promotions firm that Instacart said was intended to help retailers offer real-time savings opportunities.

The $60 million monetary judgment requires payment within 14 days of the order's entry by electronic fund transfer. The settlement stipulates that Defendant's counsel holds these funds in escrow for no purpose other than payment to the Commission. All money received will be deposited into a fund administered by the Commission for consumer redress, including refunds and any attendant expenses for administering the redress fund. If direct redress to consumers proves wholly or partially impracticable, or if money remains after redress is completed, the Commission may apply remaining funds for related consumer information remedies reasonably related to the practices alleged. Any unused funds will be deposited to the U.S. Treasury.

The order establishes comprehensive compliance monitoring for 10 years. Instacart must submit a compliance report one year after the order's entry, sworn under penalty of perjury, identifying primary contact information, describing all businesses providing goods or services to U.S. consumers related to the order's subject matter, and detailing whether and how the company complies with each section. For any goods or services sold with negative option features, the report must describe marketing methods, enrollment and cancellation processes, trial offer availability, and charge timing and amounts.

For 10 years, Instacart must submit compliance notices within 14 days of any changes to designated contact points or structural changes affecting compliance obligations. The company must notify the Commission within 14 days of any bankruptcy petition, insolvency proceeding, or similar filing. The FTC retains authority to request additional compliance reports, conduct depositions, and inspect documents within 14 days of written requests. Commission representatives may pose as consumers, suppliers, or other entities to test compliance without identification or prior notice.

The settlement requires Instacart to create and retain specific records for five years after the order's entry, including accounting records showing revenues from all goods or services sold, records of all consumer complaints and refund requests concerning the order's subject matter, all records demonstrating compliance, representative samples of advertisements or marketing materials, and for any goods or services sold with negative option features, digital versions of each unique page or screen of enrollment processes for U.S. consumers.

Within seven days of the order's entry, Instacart must deliver copies to all principals, officers, directors, LLC managers and members, all employees with managerial responsibilities for conduct related to the order's subject matter, and any business entity resulting from structural changes. The company must obtain signed and dated acknowledgments of receipt within 30 days from each individual or entity receiving the order.

The facts alleged in the complaint will be taken as true without further proof in any subsequent civil litigation by or on behalf of the Commission to enforce payment rights or monetary judgment. The facts establish all elements necessary to sustain an action under Section 523(a)(2)(A) of the Bankruptcy Code, giving the order collateral estoppel effect for nondischargeability proceedings. Defendant relinquishes dominion and all legal and equitable rights to all assets transferred and may not seek their return.

The settlement reflects broader FTC enforcement patterns addressing subscription service practices and advertising transparency in digital commerce. Match Group agreed to a $14 million settlement in August 2025 for similar issues around deceptive advertising practices and problematic billing procedures on its Match.com platform, including misrepresentations about guarantees and retaliation against consumers filing billing disputes. The FTC finalized its "Click to Cancel" rule in October 2024, requiring sellers to make canceling subscriptions as simple as signing up and mandating clear disclosures before obtaining billing information.

The regulatory focus on subscription practices extends beyond retail platforms. The FTC settled with e-commerce scheme operators in August 2025, securing over $20 million in monetary judgments from defendants who promised lucrative returns through AI-powered online storefronts while systematically defrauding consumers. These enforcement actions demonstrate the agency's systematic approach to business opportunity fraud, particularly schemes targeting consumers seeking alternative income sources through deceptive technology claims.

For the marketing community, the Instacart settlement underscores the importance of transparent pricing disclosure in digital advertising and e-commerce platforms. Companies offering subscription-based services face heightened scrutiny around enrollment processes, cancellation mechanisms, and refund policy communication. The settlement's prohibition on contradictory or mitigated disclosures establishes that qualifying language buried in terms and conditions cannot override prominent advertising claims. Material terms must be disclosed unavoidably in interactive electronic media, and disclosures must appear immediately adjacent to consent recording mechanisms.

The enforcement action carries implications for retail media networks and advertising platforms built on grocery delivery infrastructure. Instacart has expanded partnerships with streaming platforms including Roku for shoppable ad formats and PubMatic for programmatic advertising solutions that leverage first-party retail data for audience targeting. The settlement's restrictions on misrepresenting material facts in transactions extend to promotional materials and could affect how the company communicates value propositions in advertising partnerships.

The settlement does not constitute an admission of liability or wrongdoing on Instacart's part, and the company neither admits nor denies the allegations except as specifically stated. Both parties waived all rights to appeal or otherwise challenge the order's validity. The court retains jurisdiction for purposes of construction, modification, and enforcement. The order will remain in effect for 10 years after entry, after which it will expire and no longer impose requirements on the defendant.

Timeline

• 2013-2019: Instacart allegedly engages in deceptive practices around free delivery claims, satisfaction guarantees, and membership enrollment
• December 18, 2025: FTC and Instacart file joint motion for entry of stipulated order in U.S. District Court for the Northern District of California
• December 18, 2025: Court documents reveal $60 million settlement resolving allegations of false advertising and unauthorized subscription charges
• October 16, 2024: FTC finalizes "Click to Cancel" rule making it easier for consumers to end recurring subscriptions
• August 12, 2025: Match Group settles FTC charges for $14 million over deceptive dating service practices
• August 25, 2025: FTC announces settlements with e-commerce scheme operators totaling over $20 million in judgments

Summary

Who: Maplebear Inc. (doing business as Instacart), the online grocery delivery platform, settled with the Federal Trade Commission. The settlement affects hundreds of thousands of consumers who were charged membership fees without express informed consent or who experienced deceptive advertising around free delivery and satisfaction guarantees.

What: Instacart agreed to pay $60 million and accept permanent restrictions on business practices to resolve allegations of false advertising about free delivery, misleading satisfaction guarantees, and charging consumers for annual subscription memberships without proper consent. The settlement prohibits misrepresenting delivery costs, requires clear disclosure of all fees when advertising free delivery, mandates transparent refund policies, and requires express informed consent before charging consumers for services with negative option features.

When: The alleged violations occurred between 2013 and 2019. The FTC filed the complaint and stipulated order on December 18, 2025, in federal court in San Francisco. Payment of the $60 million must occur within 14 days of the order's entry. The compliance monitoring period extends for 10 years from the order's entry date.

Where: The case was filed in the U.S. District Court for the Northern District of California, San Francisco Division. The alleged practices affected consumers throughout the United States who used Instacart's grocery delivery platform for orders from retailers nationwide.

Why: The FTC alleged Instacart violated Section 5 of the Federal Trade Commission Act and the Restore Online Shoppers' Confidence Act by making false or misleading claims in advertising, failing to disclose material terms of subscription membership services, and charging consumers without their consent. Christopher Mufarrige of the FTC stated the agency is focused on monitoring online delivery services to ensure transparent competition on price and delivery terms. The settlement reflects broader regulatory scrutiny of subscription service practices, negative option marketing, and advertising transparency in digital commerce.