Instacart Service Charge: Do You Know What You're Paying For? - NBC Southern California
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Instacart Service Charge: Do You Know What You're Paying For?

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    NEWSLETTERS

    What's Behind the Instacart Service Fee

    When you pay the online grocery delivery service Instacart's fees, do you know where that money goes? It's not toward a tip. Randy Mac reports for the NBC4 News at 6 Friday, April 27, 2018.

    (Published Friday, April 27, 2018)

    Many of us have crossed grocery shopping off our to-do lists, and we're hiring someone else to do it for us. But some say a popular grocery delivery service is misleading consumers and cheating its employees. Instacart is a popular grocery shopping and delivery service. There's a fee to use it - which is clearly disclosed. But there's another fee many consumers pay - and they say Instacart isn't so upfront about that one.

    Georgia Pine orders her groceries using the Instacart app on her iPad. And a few hours later, they’re delivered to her doorstep.

    It's a service she likes and relies on. But she's also ticked off at Instacart.

    "I really feel they need to value both their employees and customers a little more,” Pine said.

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    The issue is a 10 percent “service fee" added at check-out. Pine assumed it was a tip for the shoppers and delivery people.

    "People who do read that and see it, say, ‘oh that's the tip,’” she said.

    But it's not. Instacart employees told Pine they don't see that money.

    "They were angry, because they weren't getting tips,” she said.

    Instacart employees complained to the I-Team, too.

    "We've all been wondering where that money's going. Because we're not getting it," Sergio Betancourt Jr., an Instacart delivery person.

    NBC4 wanted to talk to Instacart on camera, but after repeated requests, the company wouldn't schedule an interview.

    But, in an email Instacart confirmed the service fee is not a tip, saying: “It can be used for shopper wages, customer support and operational expenses.”

    Attorney Julie Erickson has an issue with that. She filed a class action lawsuit against Instacart, saying the company is misleading consumers, who assume the service fee is going to the shopper who's picking up their groceries.

    "What they thought they were leaving as a tip was actually not reaching the shopper, it was going in instacart's pocket,” Erickson said.

    Erickson reached a settlement with Instacart. The company agreed to modify its website and app -- making it clear to consumers where the service fee money goes.

    "The goal is two-fold. First, hopefully the shoppers will see their take home income go back up,” she said. “And two, the customers know where their money is going."

    Pine is happy to see the changes.

    "They need to explain to their customers - exactly where this 10 percent is going. And to their employees,” she said.

    You won't see changes in Instacart's app just yet. A few more legal issues need to be hashed out. So until that change happens, know this: you can click on a button next to the service fee and opt out of paying it. And you can add a tip instead. Instacart says tip money goes only to the shopper and delivery person for your order.

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