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instacart has announced that it is discontinuing a controversial pricing Program This allowed some customers to see different prices For the same product, ordered together from the same gatherwhile using it delivery service,
The move comes after significant public scrutiny and concerns over transparency.
The decision comes after a report from advocacy groups like Groundwork Collaborative and More Perfect Union, as well as Consumer Reports, found that Instacart offered shoppers nearly three out of every four grocery items at multiple prices during an experiment.
The practice raised concerns, causing Instacart to say in a blog post, “At a time when families are working exceptionally hard to stretch each grocery dollar, those tests have raised concerns, leading some to question the prices they see on Instacart. This is not okay – especially for a company built on trust, transparency, and affordability.”
The program, which launches in 2023, was initially intended to help grocers understand customer price sensitivity, showing how physical stores may offer different prices at different locations.
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Instacart clarified that it is neither “dynamic pricing”, where prices fluctuate with demand, nor “surveillant pricing”, which sets prices based on personal data. Instead, prices were introduced randomly, with some customers seeing slightly higher or lower figures. For example, the Consumer Reports experiment found that Instacart customers were shown one of five different prices for a dozen lucerne eggs from a Washington, D.C. Safeway, $3.99, $4.28, $4.59, $4.69, or $4.79.
Whereas retailers While the delivery platform will retain the autonomy to set its own prices and vary them across its brick-and-mortar outlets, Instacart confirmed that “from now on, Instacart will not support any item price testing services.” The company declined to say how many customers were affected, but said the service was immediately shut down.
The development follows a separate legal challenge last week, where Instacart agreed to pay $60 million in customer refunds to settle federal charges of deceptive practices.
The Federal Trade Commission accused the company of falsely advertising free delivery and failing to clearly disclose service fees, which can add up to 15% to an order. Instacart denied wrongdoing in that case, saying the settlement was reached to allow it to move forward.
In its blog post, Instacart concluded, “Trust is earned through clarity and consistency. Customers should never have to second guess the prices they’re seeing.”