Instacart is ending its AI price-testing program, which led to customers seeing different prices for the same item at the same store at the same time, the company wrote in a blog post Monday.
The announcement comes about two weeks after groups Consumer Reports, Groundwork Collaborative and More Perfect Union published a reporton the practice that found price discrepancies of as much as 23 percent for certain products.
Consumer Reports and More Perfect Union are nonprofit media organizations, and Groundwork Collaborative is a left-leaning think tank.
After listening to customer feedback, Instacart said it accepted the testing “missed the mark for some customers,” according to the news release. “Now, if two families are shopping for the same items, at the same time, from the same store location on Instacart, they see the same prices — period.”
The company said retailers will no longer have access to Eversight software, which ran the price experiment. Instacart acquired Eversight in 2022 and started rolling it out to retailers the following year.
Phil Radford, president and chief executive of Consumer Reports, said he and his colleagues “welcome Instacart’s decision to reverse course,” and urged policymakers to pay attention and investigate “these types of AI-pricing experiments on consumers.”
The report led to widespread pushback from consumers. A TikTok videofrom More Perfect Union about the investigations has over 1.2 million views as of midday Monday. Members of Congress also spoke out, urging federal regulators to investigate. Last week, Reuters reported that the Federal Trade Commission had opened an inquiry into the company’s pricing practices.
Instacart shares fell about 6 percent the day after the report was released. It shed 2 percent Monday, to close at $45.02, but is up 8.7 percent year to date.
As part of its research, the three groups enlisted 437 shoppers in four cities to conduct live tests. The groups simultaneously added the same products to their carts and recorded the prices. The report found that of the grocery items tested on Instacart, nearly three-quarters showed different prices, and some had as many as five different price points. Overall, researchers found that the average difference in Instacart basket prices was about 7 percent.
While Instacart accepted the price discrepancies noted in the report, it said that some of the findings included “misconceptions and misinformation about what we do — and don’t do — when it comes to prices.”
For example, it says in a blog post, Consumer Reports’ claim that a typical family is spending $1,200 more on groceries as a result of these short-term, randomized pricing tests is “completely wrong.”
Instacart reached a separate settlementwith the FTC last week to issue $60 million in customer refunds to resolve different allegations of regarding pricing tactics. The company “misled consumers by advertising free delivery services — and then charging consumers to have groceries delivered — and failing to disclose to consumers that signed up for a free trial that they would be automatically enrolled into its subscription program,” said Christopher Mufarrige, director of the FTC’s bureau of consumer protection.
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