Instacart Responds to Shoppers’ Suspicion About Hidden Fees

By: Ben Campbell | Published: Dec 05, 2023

Instacart has left its customers shocked after an independent investigative watchdog revealed what some shoppers had long suspected, and it’s causing mayhem on the internet.

Shoppers could be paying twice as much for everyday staples such as butter and bread by using the convenient app to order groceries from stores such as Costco.

Convenience Comes at a Price

Instacart is one of the quickest-growing services in North America. The app, which allows users to order from their favorite stores from the comfort of their homes, has seen a boom since the COVID-19 pandemic.

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Clark resident Jen Valencia still works part-time for Instacart, shopping for two customers at a ShopRite

Source: Michael Loccisano/Getty Images

While users of Instacart know the price of their weekly groceries will rise due to delivery and service fees, some were unaware that they could be paying as much as $2.50 more per item.

Marketplace Investigation

A recent Marketplace investigation into groceries sold through Instacart from Walmart, Costco, and Loblaws has revealed that customers are paying as much as 10% more per item.

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Women shops for two customers via the Instacart app in Clark, New Jersey

Source: Michael Loccisano/Getty Images

The extra charge on groceries and the service fees and missing out on in-store specials means customers are paying significantly more for their weekly grocery haul.

What Is Unclear About the Service

Users of Instacart have admitted they don’t mind paying a little extra for the convenience.

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Close-up of the white and green logo of grocery delivery app service Instacart on a light wooden background

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However, according to the study, it’s unclear how much extra consumers pay. Critics of the app suggest that Instacart may be taking advantage of people with disabilities who depend on the app for access to food.

The Truth Behind the Mark-Up

To get to the bottom of the mystery, Marketplace compared the prices of several popular items on the Instacart app and in-store. The results were shocking.

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Instacart part-time employee shops for two customers in Clark, New Jersey

Source: Michael Loccisano/Getty Images

While prices at Walmart appeared to be the same in-store as on the app, markups were observed if people shopped at Costco and Loblaws.

Everything Marked Up at Costco

The team at Marketplace was surprised to see that everything at Costco was marked up on the Instacart app.

A Costco store is seen on September 23, 2022, in Monterey Park, California.

Source: Eric Thayer/Getty Images

Whereas only a few items, including cucumbers, were marked up at Loblaws. In one instance, Marketplace paid $12.99 in-store for Italian meatballs. Yet, on Instacart, the same product was $15.35 — a markup of over $2.00.

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Shocking Revelation

Marketplace decided to order 20 everyday items from Loblaws on Instacart and then purchase the same items in-store.

A Costco customer pushes a shopping cart as she leaves the store in Novato, California

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The in-store total was $242.49, whereas the Instacart total for the same items was $316.65. When compared, there is a total difference of $74.16.

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Customers Opinions

Joanne Dominico, a mother, and small business owner, was part of Marketplace’s study. She went on to give her opinion on the findings.

Woman does her weekly shopping inside a supermarket in Woodbridge, New Jersey

Source: Michael Loccisano/Getty Images

“I’m thinking that that’s ‘thief.’ That’s the Caribbean word for being ripped off, so I’m very surprised, and I feel misled,” said Joanne Dominico.

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Double the Price

During the investigation, the Marketplace team was shocked to find that some in-store items were almost twice the price on Instacart.

A packaged block of Anchor butter from the supermarket

Source: Jill Ferry/Getty Images

In one instance, they paid $8.00 for a block of butter. Yet, in-store, the same product was only $3.99.

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Why the Increase in Price?

Marketplace emailed both Costco and Loblaws to question why such a dramatic price increase was observed when customers used the Instacart app.

Customer shops for meat at a Safeway store in San Rafael, California

Source: Justin Sullivan/Getty Images

Both grocery stores replied with similar answers. They claim Instacart keeps all of the profits from price differences, in addition to the service and delivery fees.

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Instacart Refuses to Comment

When the Marketplace investigators reached out to Instacart, they confirmed that retailers were responsible for setting their own prices.

People shop in the meats section of a grocery store as prices are displayed

Source: Mario Tama/Getty Images

However, they did not respond when questioned about who receives the money from the markups.

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We Notify the Customer

A spokesperson for Instacart would later claim they inform all of their customers when the prices on the app exceed those in-store.

Older man compares the prices of various types of meat inside a supermarket in Chicago, Illinois

Source: Scott Olson/Getty Images

They said, “Where there are item markups by a particular retailer, we notify customers that prices vary relative to store prices so they can make clear and informed purchasing decisions.”

Source: Business Insider India

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