Instacart caught using AI pricing to charge different prices for the same groceries across stores
12 Sources
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Instacart Is Using AI to Show Different Prices for the Same Items
Instacart has been charging customers different prices for the same products, despite the items being picked up from the same store. While customers have at times suspected that something was amiss with Instacart prices, the inconsistent pricing was revealed in a study published this week by
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Instacart's algorithm is quietly charging people different prices for the same groceries
Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. A months-long joint investigation by Consumer Reports and Groundwork Collaborative has uncovered widespread price testing on Instacart's grocery delivery platform. The research shows that identical
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Instacart 'AI pricing' exposed with same exact products being sold at different prices -- here's the company's response
A huge report from Consumer Reports, Groundwork Collaborative and More Perfect Union has revealed that pricing experiments by Instacart could be inflating or reducing grocery prices for different users on the same items at the same stores. These prices could differ up to 23% at some of the largest
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Instacart Caught Using AI to Charge Wildly Different Prices for the Same Item
Does your online grocery order ever feel fishy, like the prices just aren't adding up? It turns out you're right to be suspicious -- and now we have compelling evidence. New research by a consortium of groups including Groundwork Collaborative, Consumer Reports, and More Perfect Union have found
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Instacart may be jacking up your grocery prices using AI, study shows -- a practice called 'smart rounding' | Fortune
The methodology: In September, Consumer Reports and the progressive think tank Groundwork Collaborative used ~200 volunteers to check prices on 20 items in four cities. The volunteers simultaneously chose the same product from the same store and found price differences in ~75% of items. Costco,
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Instacart takes dynamic grocery pricing to new levels
A new study from Consumer Reports and Groundwork Collaborative shows that the digital shopping platform Instacart is testing an algorithmic pricing model that could cost shoppers an extra $1,200 a year. Additionally, Instacart consumers reportedly weren't aware that prices were changing or that
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Instacart's AI-enabled pricing may bump up your grocery costs by as much as 23%, study says
Mary Cunningham is a reporter for CBS MoneyWatch. She previously worked at "60 Minutes," CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program. Instacart customers may be surprised to discover they are unwittingly paying more for the same items sold by some of America's major
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Instacart responds to new report on grocery store price experiments
A survey found that Instacart has been experimenting with grocery pricing. New research has put a spotlight on how new technology has changed the way retailers may start setting grocery prices, with one study finding that some shoppers are paying different prices for the exact same cart of food at
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Instacart charges shoppers different prices for same items, report says
Track grocery prices by city and item with USA TODAY's interactive shopping cart. Instacart is experimenting with pricing, charging some people shopping for groceries at the same time and same store location prices that can vary by as much as 23%, an investigation has found. On average, that
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Instacart Was Charging Wildly Diverging Prices for Different Shoppers, an Investigation Found -- So I Checked My Costco Orders
My own receipts showed similar double-digit swings, and prices shifted down to the penny, with staples like eggs, butter and olive oil costing wildly different amounts from one order to the next, far beyond normal grocery inflation or what's seen in consumer apps tracking Costco prices over
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Yet Another Reason To Hate AI: Dynamically Priced Groceries
How would you feel about paying more for something because an algorithm determined you'd be willing to spend more, for the same item, than someone else? Bad, right? Turns out Instacart has been using "algorithmic pricing" to determine the price of items, sometimes increasing the costs of
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Exclusive | Lawmakers mull action on 'dynamic' AI-powered pricing in wake of...
Lawmakers are aiming to crack down on so-called "dynamic pricing" in the wake of a jaw-dropping report showing that grocery delivery app Instacart charged shoppers different prices for the same items at the same stores without telling them, The Post has learned. Members of Congress "were
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A joint investigation by Consumer Reports and Groundwork Collaborative reveals Instacart has been running extensive price-testing experiments using AI-powered algorithms. The study found that 74% of identical grocery items showed varying prices for different customers shopping at the same stores, with price differences reaching up to 23% in some cases.
Instacart Faces Scrutiny Over AI Pricing Experiments
Instacart has been charging customers different prices for the same items despite products being picked from identical store locations, according to a comprehensive investigation published by Consumer Reports, Groundwork Collaborative, and More Perfect Union
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. The months-long study involved 437 volunteers across four cities who simultaneously added specific items from designated stores to their carts, revealing that nearly 74% of products displayed varying prices1
. Every participant encountered algorithmically determined price differences during the controlled experiments2
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Source: ABC News
The research uncovered significant variations in pricing across major retail partners including Albertsons, Costco, Kroger, Safeway, Sprouts Farmers Market, and Target
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. In one striking example, shoppers adding a dozen Lucerne eggs from a Safeway store in Washington, DC, saw five different prices: $3.99, $4.28, $4.59, $4.69, and $4.791
. At a Target store in Ohio, identical grocery baskets ranged from $84.43 to $90.471
. Seattle-area tests revealed that the same Safeway cart cost some shoppers $123.93 while others paid $114.34 or $119.854
.The Technology Behind Dynamic Pricing Tests
The price-testing experiments rely on Eversight, an AI-powered pricing tool that Instacart acquired in 2022
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. This acquisition marked Instacart's strategic shift from logistics provider to technology platform, enabling the company to market pricing optimization tools using machine learning2
. The system operates similarly to dynamic pricing models used by airlines and hotels, analyzing large datasets from its online marketplace and adjusting prices within select product categories and user groups2
.Investor materials reveal that the technology can boost sales by one to three percent and increase profit margins by up to five percent for grocery partners
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. The company's machine-learning tools include AI-driven smart rounding, which adjusts prices in fractional increments to test price sensitivity2
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. According to investor documents, smart rounding helps retailers set prices more precisely based on consumer responsiveness, generating millions in additional annual sales for large grocery partners2
.Financial Impact on Households
On items selected for the survey, the average price difference between the lowest and highest price was 13%, with the largest differential for a single item reaching 23%
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. Consumer Reports found price differences ranging from seven cents to $2.56 for single items in identical carts2
. Applying a variation of 7% to the $363 that Instacart says an American household of four spends per month on groceries, the cost swing would amount to roughly $1,200 per year1
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. With nearly half of Americans reporting that grocery prices are a major source of financial stress, these random price swings make budgeting increasingly difficult1
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Source: TechSpot
Company Response and Retail Partner Denials
Instacart confirmed conducting dynamic pricing tests using artificial intelligence software with roughly 10 retail partners, though it declined to identify them all
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. The company stated that products are part of price-testing experiments conducted with retail partners, explaining that "just as retailers have long tested prices in their physical stores to better understand consumer preferences, a subset of only 10 retail partners -- ones that already apply markups -- do the same online via Instacart"1
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. These limited, short-term, and randomized tests allegedly help retail partners learn what matters most to consumers and how to keep essential items affordable1
.However, Target denied any participation, stating it "is not affiliated with Instacart and is not responsible for prices on the Instacart platform"
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. Companies whose stores were involved told researchers they had no idea the tests were being run4
. Following the report, Instacart discontinued tests at Target and Costco1
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Surveillance Pricing Concerns and Data Usage
Instacart insists the experiments are "not dynamic pricing [since] prices never change in real-time, including in response to supply and demand" and claims they "never use personal, demographic, or user-level behavioral data"
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. The company says users are randomly assigned to price-testing cohorts by product category and region, not by identity2
. However, patent filings by Instacart and Eversight from 2017 to 2025 mention the potential use of behavioral and demographic data such as age, household size, income, and purchase history to refine offers and group customers into "subpopulations"2
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Source: HuffPost
Consumer advocates warn that these features represent early stages of surveillance pricing, a model where companies use highly personalized data to charge different prices for the same groceries
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. In 2024, the Federal Trade Commission issued a warning against eight companies accused of using personal data to set individualized prices on the same goods and services3
. Former FTC Chair Lina M. Khan stated that "firms that harvest Americans' personal data can put people's privacy at risk. Now firms could be exploiting this vast trove of personal information to charge people higher prices"3
.Regulatory Response and Industry Implications
The investigation also uncovered multiple instances of "fictitious" or "false reference" pricing, where Instacart presented different original prices for discounted items, altering the perceived size of the discount
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. Seattle volunteers shopping at Safeway through Instacart saw Premium brand saltine crackers with original prices ranging from $5.93 to $6.69 before the app applied the identical sale price of $3.992
. Laura Smith, legal director at the nonprofit Truth in Advertising, noted that dynamic algorithms are accelerating false discounting, creating a sense of urgency and unfairly affecting competition2
.Several states have started introducing bills or enacting laws to address algorithmic pricing
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. New York state implemented the Algorithmic Pricing Disclosure Act in November, which requires companies to display a disclaimer reading "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA"3
. The next phase in algorithmic pricing may already be unfolding through efforts like Instacart's Carrot Tags program for retailers, which would enable "instant and accurate pricing changes with dynamic price and promotion optimization strategies at the shelf"3
. Companies like Walmart, Kroger, and Whole Foods have moved to implement dynamic pricing for in-store shoppers as well, with Kroger experimenting with these systems since 2018 and rolling them out to hundreds of brick and mortar locations4
.References
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