You may have gotten grocery delivered to your home by Instacart, but do you know exactly how much the Instacart markup is on the goods? It may be more than you think!
Grocery delivery – sounds like a dream come true, doesn’t it? You don’t have to deal with screaming kids in the shopping cart, threatening to jump out any time you turn your back to grab something off the shelves. You can shop for groceries right on your phone or computer while the baby naps or even shop ahead of time and schedule the delivery the next day. I was a huge fan when Amazon Prime Now came online and used it plenty for Sprouts. Then when Costco started offering same-day delivery services with Instacart, I was over the moon!
What is Instacart?
In case you are not familiar with Instacart, it is an online grocery delivery service company that partners with local stores to deliver groceries to your door. After you place your order, the items can be delivered to you as little as within 2 hours of you checking out. Instacart has a team of shoppers who will go out to the stores and shop your groceries for you (they might do multiple orders at the same time), and after they are done, they will deliver to the respective homes.
How much is Instacart charging for its services?
Before I get into how much extra Instacart is costing you, I want to say that I understand Instacart and its shoppers need to make money. After all, you are paying for the convenience of having grocery showing up at your doorstep versus wrestling with your kids to get into their car seats. Plus, Instacart does have a disclaimer on the website saying that the prices in the online store are indeed higher than the local stores. However, I did not really comprehend exactly how much extra I was paying until one of the shoppers accidentally gave me her receipt from Costco.
First, I didn’t know that the shopper wasn’t supposed to give you the paper receipt. My shopper gave me the paper receipt because she started carrying items that I didn’t order into my house and I wanted to make sure I was getting exactly what I ordered. Honestly, I have ordered from Costco using Instacart so many times I lost count and I never thought about how much more I was paying. I assumed I was paying a little more, but so worth the convenience plus gas money. It wasn’t until I got the paper receipt that I noticed that the total was nearly $20 less than what I paid online.
Here is a breakdown of the items I purchased and the markups:
25
Instacart does have certain exclusive deals such as this one:
However, since you are paying an average of 25% markup, it doesn’t make sense for you to stock up to save that $5. You would be only saving about 17% if you get $5 off $30, and most likely you will go over the minimum to get the discount, so overall you are paying more instead of saving. Therefore, don’t be fooled by Instacart’s marketing ploy enticing people who want to save – even with the coupons and deals you are still paying more.
I contacted Instacart to double check on the prices. This is their reply:
I apologize that you received the paper receipt with your delivery.
Really? I mean, that reply just makes you sound so shady, like you are trying to hide the actual prices because you don’t want us to know the markups you are charging.
The refund policy(Careful what you buy!)
Here is the policy when you want to return items at Costco:
For perishables: Contact Instacart if you are not satisfied with your perishables. I have gotten rotten fruits a couple of times and Instacart gave me a refund for those items.
For non-perishables: Pay attention to this one. Costco will refund you THE PRICE YOU WOULD HAVE PAID AT THE WAREHOUSE. Since the markup goes to Instacart, Costco will not be able to provide you with a refund for the service and delivery fee. Therefore, you better be sure you want what you ordered, or else you will be losing 25% of the purchasing price when you return the item at your local warehouse.
Is Instacart worth it?
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The answer is … depends. If you are a new mom, for example, and you have a colicky newborn who cannot stand car rides or needs to nurse all the time, then yes, it’s worth it. It’s like that commercial where you conclude that avoiding pulling out your hair because your kids love to throw tantrums in middle of a grocery store is priceless. Grocery delivery services really is a life changer when you are in a situation where going to the store is not an option.
However, if you can drive to the store or have your husband help with shopping, going to your local store will save you a lot more money. Or at least you won’t be paying that 25% markup.
Before I go, I want to note that if you are an Amazon Prime member, getting delivery from Amazon Fresh and Whole Foods is a great option. This is what we have been doing to avoid the Instacart markups. Sure, buying in bulk from Costco can usually save you money, but when you add in the markups, Amazon Prime is the cheaper choice.
How much are you willing to pay for convenience?
I am sure that stores who showed an 8% profit last year like Publix can well afford a del service rather than giving that addt”l charge to their customers. 25% is alot. If insta cart is a 2 billion business, why don’t they pay their delivery people enough money that a tip is optional .
this is definitely not a very inexpensive service
yeah I am not sure, I was just really shocked when I saw the receipt!
Hi Betty, I was shocked as well. I believe there should be a consumer protection regulation that requires that the markup % be clearly stated and transparent to the consumer up front..
so true! I completely agree.
I’d like to see your reaction to Amazon Fresh. They have transparent pricing.
I will look into it! I use Amazon Fresh quite often. I have not been to a physical Amazon store yet, that would be so interesting to go!
Thank you for taking the time to post. my shopper left me my Costco receipt “by accident”. My markup averaged 36 percent! When I questioned IC, they quickly tried to hide it by saying in store prices vary from IC prices. I responded that Costco is a “same as in store” pricing and IC replied “some times sales change from the time you place your order” I mean really! Just be honest!!
Exactly! I understand that we have to pay higher prices for their service, but it’s the lack of transparency that made me upset!
I wish I had known when this was written, I just used instacart for the first time yesterday and was overcharged by 22%. IC is saying now that prices are set by the stores not them, and are refusing to say who gets to keep that extra 22%. Had they been upfront from the beginning and allowed me to decide if I wanted to pay that additional amount or use it for a tip, I’d be fine, but they are shady and marketing all these perks and free delivery fees,ran while over charging on tax and pocketing it, and placing blame on the stores.
I will be reaching out to our district attorney.
Yeah it’s the lack of transparency that bothers me, I don’t mind the markup if it’s disclosed properly.
Thank you for writing this. We have been using Instacart to shop Costco lately and noticed it was a significant markup. Haven’t run all the numbers but seems like it’s about 25%. For how much we order we lose money, but I suppose for others who don’t have the time or don’t order a lot it could be worth it. Personally I’d be ok with 10-15% markup, but 25% is too much.
I agree, 25% is a lot. But during this quarantine I guess there isn’t too much choice!
I calculated the markup for Costco’s cooked spare ribs is 42% according to the price tag on the cover. The extra fee of my last Costco’s Instacart service is nearly 35%. I am not only disappointed at Instacart but also at Costco,, I felt I was being cheated. So no more Instacart and Costco. I am much happier with Amazon Prime and Whole food or curb side pickup of other supermarkets.
Wow I wonder if they increased the markup recently because everyone is ordering these days? That’s horrible. I understand they are providing a service but that’s a lot of money for food. Buying in bulk doesn’t make sense in that case. I agree with you that Amazon Fresh or Whole Foods is the way to go!
Not only did I have mark-ups but they also charged a very hefty service fee (none of it goes to the driver/shopper). I also was charged a heavy fee and a delivery fee and a i gave a nice tip. I don’t believe I’ll be using their service again.
Wow I didn’t see a service fee in addition to the markup, but I am sure it’s different depending on where you are. I am sorry to hear about your experience!
Thanks for the article. I was thinking the markup had to be at least 20-25% to make sense. If someone’s order is $100, they only make $25 gross revenue. The shopper has to go to the store, shop and then deliver to your house. If I go to Costco, it’s usually a 2 hour affair give or take. So it seems like the shopper doesn’t do that great, although I usually order about $200.. I currently have some $15 off coupons to apply, so that makes it a bit easier to swallow, especially during the pandemic. I find that even with the markup, the prices for Costco seem reasonable compared to local stores like Sprouts or Ralph’s.
These days, I am very appreciative of the shoppers that put themselves at risk to deliver us groceries. It does give me heartburn though when I order $400 worth of groceries and know the markup is probably $100 (ouch!). Unless I want something specifically from Costco, I now order from Amazon Fresh because you can get free delivery if you have Prime. It would be expensive to order from Sprouts because they also use Instacart so you get the higher prices (since no bulk) plus markup!
I paid $349 to Instacart for a Costco delivery today. The actual Costco bill was $249.
Wow that’s so much! I just ordered from Amazon Prime bc the markup is just way too much from Costco.
I ordered yesterday using Instacart from Costco and accidentally the guy left receipt along with items ordered. I paid $380 for $287.76 worth of items. No issues with service OR overall ease of use however I have big issue with transparency . I though I am paying $9 for delivery & $18 for Service Fee Plus additional tip. I wrote to instacart customer service and here is response :
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Instacart works with our retail partners to offer customers the same prices as those found in the physical store as much as possible. However, some retail partners choose to set their items at a higher price point on the Instacart platform than what they offer in store. That’s why you may see a price difference while shopping.
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The receipt says $287.76 so I don’t know why instacart puts it on retail store (Costco) , it is instacart which is charging these additional marks . Also , they added additional $4 for picking up Lamb (special handling). I have no problem as long as they are transparent in their pricing however this is plain cheating.
I agree completely. The lack of transparency was what really bothered me as well. If you are going to charge an arm and a leg for your service, then say it and let us decide whether or not we will pay for it. But instead, they seem to want to hide the receipt, and like you said, blame the store for it.
And that shopper who gave you the receipt and you reached support(which does nothing at all they still do the same thing) is now FIRED!
She was probably new and didn’t know any better but now shes out of a job
Like I mentioned above, 1) she gave me items that I didn’t order and that’s why I asked for the paper receipt. If I didn’t point that out and just accepted all these items I am sure she would have gotten in trouble anyway. 2) I didn’t call customer service to tell on her. I called because I was super confused about the prices. I thought I pay the same price as Costco plus some handling fee, I did not expect all the prices to be marked up.
This happened to me yesterday. The shopper who dropped off $229 of groceries inadvertently left the receipt. I noticed we were missing an item. As I checked off the receipt I too wondered why I had an extra $51 charged on my card. I understand the delivery fee, tax, service fee and tip, but the total amount for just the groceries went from $229 to $280 with no explanation. I called to let them know I was missing an item and questioned the $51 charge for what they deemed markups by Costco. She told me to read the generic blurb but It was clear looking at the receipt that Instacart did not pay Costco any more than the $229. I questioned this and demanded my money back. I was told I would get a refund in 4 increments ($20,$20, $11 and the cost of the missing product.) Weird. It is called the Happy Client Refund. I am sorry if someone lost their job, but this is unethical. I too will continue curbside and delivery from my local grocery stores. No more Instacart!
Wow I am surprised they agreed to give you a refund! I am glad you were able to get some money back. I have not heard of the Happy Client Refund. For the most part, I am using my Amazon Prime membership and getting food from Whole Foods or Amazon Fresh. Even with the expensive Whole Food’s expensive prices, it’s still worth it in comparison to the markup from Instacart.
I ordered printer ink from Costco in May and since I was a newby I didn’t realize that if the one I ordered wasn’t available it would be replaced with another. The ink was not compatible with my printer and I didn’t know what to do so I held on to it for a return later, (because Costco takes returns long into the future). Last week, I stopped by Costco at a late hour and there was no crowd so I felt it was safe to go in. The returns cashier told me that I had to return it through Instacart but he then called the supervisor who said she would take the return if I have a receipt. I found the receipt in my phone and showed it. The supervisor approved the return and when the cashier asked the amount to refund she instructed him to return the full amount I paid, he was surprised at her response and they whispered between each other, I said “I don’t care about the extra charge, I will take the store cost, I just want to return the ink”. She told the cashier that the “customer is more important, refund her full amount”. I certainly left Costco feeling great about their company.
As a side comment after reading some of the other comments I want to say that even though there is a markup with instacart, I am very happy using it because…
1) you don’t have to drive there (both ways)
2) you don’t have to shop (saves time)
3) you don’t have to put groceries in the car (or take out)
4) you don’t have to carry the bags inside (delivered to the porch)
That’s awesome you got a nice supervisor to refund you the whole amount. The person who I talked to could care less. But I do still love Costco because like you said it’s a great company.
I wrote the post to make people aware of their policies and markups because they apparently don’t want people to know. But especially during the pandemic, the markups are probably worth it.
25% mark up is not too much to pay for the convenience and the service. I disagree with others here who are complaining— as my time is worth way more than spending two or more hours driving to Costco, shopping, and then driving home. Even if it were a 30%-40% mark up, allowing me to do other work— which either pays me more, or would cost me more to hire someone else to do it, means this is saving me money. If people don’t like paying for a service, then don’t use it, but why complain about the cost? This is the reality of how a business works, and Instacart is not running a charity.
Justify it this way: When you go to a nice restaurant and pay for a meal and drinks—- and then tip the server nicely; you could have just bought the food yourself and prepared it at home, and saved the 60-70% mark up that you paid at the restaurant. Or, when you go to the ball game, you’ll pay a 300% mark up for beers, hot dogs, and peanuts than you would pay buying at the store and staying home and watching the game on TV. And I didn’t even mention the price of the tickets for the game.
And lastly, who doesn’t buy a candy bar or a soft drink from the hotel mini bar and pay 500% mark up once you factor in the “mini bar fee”… even aside from the individual cost? We do this because life is short and we are on vacation. Spending 3-4 hours per week shopping for groceries is like 8-9 days of your year. So ask yourself, how old are you know and how many days and hours do you have left, and if you want to have ended up wasting even one more day grocery shopping than you needed to? Because I’m sure that on your dying bed someday, you would pay ANY AMOUNT of money for just a few of those days back you spent fighting the crowds or people at Costco, pushing and shoving, and running you down just to be next in line for a free sample. Think of it that way and the the 25% mark up seems like a real bargain, doesn’t it?
I think everyone values things differently. For me it’s really just the fact that they seem to want to hide the markup, otherwise, I am fine paying it if I am too busy for grocery shopping (or in the case of right now, don’t want to go out because of the pandemic).
I stumbled across your site, and read your article and the emails. I am an instacart shopper and would like to point out a couple of things. First, everyone that contacts instacart complaining about cost based upon a paper receipt, you just cost someone their job. Doubt that was your intention, but that was the result, oh and the few dollars got back. Second, my opinion on markups is moot. You most likely ordered numerous times feeling cost was acceptable, but now you feel “cheated” over markup. Cost versus price is not disclosed for a majority of goods or services. Guess the markup at McDonald’s, Ford, Apple and do you call them? I’m not trying to be sarcastic, just a realist. Third, Instacart is a luxury or convenience, not a necessity so therefore you are paying for YOUR time. If avoiding an hour or 2 driving to Walmart, shopping- do you weigh every item of produce? bagging, loading/unloading, avoiding the multiple unintended purchases you make, is a pleasurable anticipated outing then by all means go do it.
From a shopper standpoint, we appreciate our customers. A majority care about providing excellent service. Remember we are out amongst crowds putting our health at risk so you dont have to. To those that think zero, $2 or whatever small tip is ok, reduce after delivery because you wanted to make sure your order was done quickly, please go shop for yourself. No offense, the best shoppers avoid those orders and we leave those for others. If you have ever falsely reported damaged/missing items or just didn’t get your order at all just to try and save a few dollars, you cost someone their job. You are a worthless less than human being. Just fyi while you laughed about the free steak, I see that deactivated shopper whose income is now lost posting how bad that makes things for them and/, or family. Some just say they know which customer it was with name/address which means rest of us avoid them.
Bottom line, shoppers work hard to do right by customers. You as customers make your decision based upon what’s your time worth for doing anything but shop. And if you get crappy service please reflect in the tip and let instacart know, likewise if your happy let us know and rate us.
It’s insightful to hear from an Instantcart shopper. I wrote this post simply to inform people of the markup because I was really surprised by it. As I wrote in the post, Instantcart was not transparent about the markup and seemed to elude my question about the price differences. There is a markup from the cost of goods to the market price, which is totally understandable because businesses need to make money. A markup by Instantcart is understandable as well because they need to pay the shoppers and make money. But my issue was why doesn’t Instant simply charge a x% markup as “Instantcart fee” instead of hiding the markup in the Costco prices? I am sure there is some agreement between Instantcart and Costco. On top of that, when I asked about it, the response of “oh you are not supposed to get a paper receipt” to me was just ridiculous. I was not given any explanation and that’s all I got. And as far as perhaps the Instantcart shopper lost her job because of me calling Instantcart, that was not my intention as I had no clue she wasn’t supposed to give me the receipt.
As I wrote in the post, in some situations the markup is totally worth it. When I was a new mom I would have been glad to pay anyone to get groceries for me so I don’t have to drag my newborn to the store. And I want to note that this post was written before the pandemic and yes, Instantcart was totally worth it to avoid the health risks. I am not saying don’t use Instantcart, but I just wanted to bring awareness to people who may not be aware of the markup.
As far as people falsely reporting damaged or missing items, that’s just wrong and I completely agree with you.
Thank you for this post. I’ve also just found out about the $20 markup from Instacart after a shopper left the paper receipt. The receipt said $59 but Instacart charged $79. Likewise, I knew this is a service and there were additional fees and charged but was appalled by the amount of markup from the item prices alone. I agree that if Instacart was transparent about the markup I would’ve been ok with it, having been able to make an informed decision. This really sucks because I did just pay for the annual subscription $99. We’ve ordered multiple times a week from Sprouts and Costco due to having a new baby, moving, and of course, the pandemic. Thank you for this post and the suggestion of Amazon Fresh with Prime free delivery. I think we’ll do that more now unless we really want specific items from some of the other stores Instacart has. Take good care, mama!
Thank you! I am doing the same, I order from Amazon/Whole Foods weekly and Costco once in a couple of months because of the markup! Stay healthy and safe <3
Well I am from Canada and I just received my first delivery (free) and I did notice that some stores have markup prices and we have a superstore and a Walmart everything i ordered was the same reg price that I would have paid except two idems potatoes were 5.99 instead of 4.99 but the cat litter was 8.98 instead of 9.98 only thing added was 2.22 service fee instead of 2.00 because of weight over 50 lbs (2.50 including taxes) plus my tip. Does the shopper see their tip? If so this is wrong also a tip should be asked/given after delivery not in advance or is it now norm to tip server at a restaurant before you get any food lol
Interesting! Hm good point about the shopper seeing their tip, I am not sure if they do see it beforehand. That would be a little weird haha.
Thx for the information here. 10% on $35+ seems reasonable to me. Of course, if they’re in CA, then they’ve chosen a bad HQ location due to high taxes and CoL. But, that shouldn’t be our problem. I’ll be using them less, or not at all going forward. Lack of transparency and greed earns a “goodbye”.
I agree the lack of transparency is what really got to me!