NEW YORK — Instacart said Monday it was ending a program in which some customers saw different prices for the same item ordered at the same time from the same store when using its delivery service.
The program was designed to help grocers and other retailers learn more about what prices customers will pay for products, similar to how stores offer different prices for the same products in different locations. But this caused concern after report Consumer Reports and two progressive advocacy groups, Groundwork Collaborative and More Perfect Union, said Instacart offered shoppers nearly three out of every four grocery items at different prices during the experiment.
“At a time when families are struggling to spend every dollar on groceries, these tests have raised concerns, causing some people to question the prices they see on Instacart,” the company said in a blog post Monday. “This is not good, especially for a company built on trust, transparency and accessibility.”
Retailers will continue to set their own prices on the delivery website, and they can still offer different prices at different physical locations, Instacart says, but “from now on, Instacart will not support any product price testing services.”
Instacart said these services are not ” dynamic pricing“, a system in which the price of something can increase when demand is high, or “observational pricing,” where prices can be set based on a user's income, purchase history or other personal information. Instead, the company said, the system was offered to customers at random.
Some customers will simply see a slightly higher price for the item, while others will see a slightly lower price. For example, an experiment by Consumer Reports and two progressive advocacy groups found that Instacart customers saw one of five different prices for the same dozen alfalfa eggs at a Safeway store in Washington, D.C.: $3.99, $4.28, $4.59, $4.69 or $4.79.
Instacart will offer price checkers to retailers starting in 2023. The company declined to say how many customers may have been affected, but it will stop providing the service immediately.
Last week on a separate occasion Instacart agreed to pay $60 million in reimbursing clients to settle federal charges of deceptive practices. The Federal Trade Commission accused Instacart of falsely advertising free deliveries and failing to disclose a service fee that adds up to 15% to orders and must be paid by customers.
Instacart has denied the Federal Trade Commission's allegations of wrongdoing and said it reached an agreement to move forward and focus on its business.
“Trust comes from clarity and consistency,” Instacart said in a blog post Monday. “Customers will never have to question the prices they see.”
