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:
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?
This post contains affiliate links. Please see my full disclosure policy for details.
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?