According to Fortune, Instacart announced on Monday it is immediately ending a price-testing program that had been running since 2023. The program showed different customers different prices for the same product from the same store at the same time, with one example showing five different prices for a dozen Lucerne eggs ranging from $3.99 to $4.79. The company faced scrutiny after a report from Consumer Reports and advocacy groups Groundwork Collaborative and More Perfect Union found nearly three out of every four grocery items were offered at multiple prices. Instacart insists this was not “dynamic pricing” or “surveillance pricing” but random testing to help retailers. This news follows last week’s separate settlement where Instacart agreed to pay $60 million in customer refunds to resolve Federal Trade Commission allegations of deceptive advertising around fees and free delivery.
Trust is the real currency
Here’s the thing: Instacart‘s entire business model is built on being a transparent intermediary between your local store and your doorstep. When that trust erodes, what’s left? The company’s blog post admitting “that’s not okay” is a stunning, if belated, admission. They basically got caught running a massive, real-time A/B test on their customers’ wallets. And in an era of intense grocery inflation, that’s a terrible look. The immediate shutdown feels less like a principled stand and more like frantic damage control, especially hot on the heels of that massive $60 million FTC settlement. Can you blame shoppers for being skeptical?
The broader pricing Pandora’s box
Instacart is trying really hard to distance this from “dynamic pricing,” which is having a moment. You know, like when Wendy’s floated the idea of surge pricing and faced immediate backlash. But the line is blurry. If you’re showing Customer A a price of $3.99 and Customer B $4.79 for identical eggs, based on a random test to see “what they’ll pay,” how is that materially different in the customer’s mind? It feels predatory. The company says retailers can still set their own prices and vary them by physical location, which is standard. But randomized, hidden testing at the individual shopper level? That’s a whole other game. It’s a dangerous experiment for any company whose value prop is convenience and reliability, not bargain-hunting.
Winners, losers, and the future of cart
So who wins here? In the short term, consumers and the advocacy groups like Groundwork Collaborative that exposed the practice get a clear win. Instacart gets to claim it’s listening and prioritizing trust. But the losers are the retail partners who used this service. They’ve just lost a powerful data tool for optimizing their online pricing. Now, will they just bake higher margins into all Instacart prices to compensate? Possibly. That’s the ironic twist: killing this testing might lead to uniformly higher prices for everyone, instead of variable ones. Instacart is in a tough spot, trying to please shareholders, retail partners, and customers all at once. This episode shows that when you push pricing opacity too far, the backlash can force your hand. The question is, what’s the next frontier for hidden fees or variable costs in the delivery economy? Because you know the search for margin never really stops.
