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Why Does Instacart Charge More Than the Store? (or do they?)

By: Author Jeff Campbell

Posted on  - Last updated:

Categories Grocery Delivery & Pickup

Instacart is a delivery service that makes shopping much easier for people. But some people have noticed that Instacart charges customers more for items than the store does. So I’ve wondered why does Instacart charge more than the store.

Instacart doesn’t always charge more than the store price. Instacart is partnered with a few stores, while others are simply on their list of choices. They charge a higher markup when the customer isn’t going to one of their preferred grocers, but you get regular prices when shopping at a partner store.

If you’re a frequent Instacart user, you might realize that you’re not getting charged more during certain shopping trips compared to others.

Understanding which stores have a price increase and which don’t can be confusing, so let’s dive into the specifics below.

Aside from wondering about whether Instacart is charging you more than if you went to the store, another common question is about tipping.

Ready to start ordering from Instacart?

CLICK HERE to go to the Instacart order page.

Should you tip Instacart drivers? 

The short answer is yes, but the percentage will really surprise you as will whether you should tip in cash or on the app. I cover it all in a recent article. So just click that link to read it on my site.

Does Instacart Charge More Than the Store?

Whether it’s your first time shopping through Instacart or you’ve used it many times before, you’re probably curious about the supposed price markup.

Instacart chargers more money for certain stores, but sometimes there isn’t any added markup fee at all. It depends on which stores you’re shopping at around town.

There was a recent outrage because customers found out that the average markup is just that: an average. Instacart holds the right to raise prices higher than the quoted percentage.

Keep in mind that it doesn’t affect all stores. However, it’s still something to remember when you’re considering using the service to replace your shopping altogether.

The best way to know whether or not you’ll be charged more at a specific store is by reviewing Instacart’s pricing information page.

According to that page, it’s the retailers themselves that set the prices charged through Instacart.

Don’t let the potentially higher prices steer you away from the app, though. Instacart is a thriving business for many reasons.

The convenience value alone is enough to make the markups well worth staying home. There’s certainly a line where it’s probably a better idea to go out instead. Still, it all depends on the markup percentage.

How much more does Instacart charge?

Instacart’s co-founder came out with a statement mentioning that they charge an average of 15% more money on stores that have a markup. Small purchases don’t get affected too much; it’s the big buyers who suffer.

A quick calculation shows us that what would normally be $50 at the store becomes $57.50 through Instacart (before the added fees).

It’s not too bad until you see that a $200 purchase is now $230 plus fees. Customers who intend to make big trips through Instacart might be worried about going to stores with such a big markup.

Supermarket News mentions that a shopper recently went to several major cities to test out the quoted average of Instacart.

The results were disappointing. They found that the 15% average quote actually came out to a whopping 23% across the multitude of stores that the shopper bought from through Instacart.

Another point to mention is that the markup is an average, which means that some of the stores have the full 15% tacked onto the final price tag.

The problem is that you often won’t know until you’ve already paid. In the end, it’s up to you to decide if the ability to stay at home and have someone else shop for you is worth the hidden fees and markups.

Even though you’re paying an average of 15% more at certain stores, some of them charge well over $100 on annual membership fees. You get to leave those costly membership fees behind by using Instacart.

Note: You’re not forced to buy through those specific shops in the first place. Instacart simply adds the markup to promote their partners, all of which you can choose as well.

But which stores do and don’t have a markup from Instacart?

You’d be surprised to see that even the most common brand names on the list.

It’s also worth noting that while Whole Foods had been an approved Instacart partner after Amazon bought Whole Foods they began to implement a plan to phase out Instacart in favor of their own free Prime delivery.

Here are a few stores that Instacart does NOT raise the prices on:

  • Petco
  • Safeway
  • Kroger
  • Publix

On the other hand, you’ll find that Costco, a brand name giant in the industry, has a significant markup through Instacart.

Does Instacart Mark Up Prices at Costco?

Yes, is the short answer.

As Instacart states, how much more seems to average out around 15%. Some customers have experienced markups as low as 10%, while others complained about the 23% mentioned above.

That being said, it doesn’t seem to have taken much of a toll on Instacart. After all, you don’t need to buy memberships to purchase from stores like Costco anymore if you’re going through Instacart.

Instacart employees already have the memberships purchased. That means you can avoid annual fees and memberships and simply pay for your purchases.

The reason that the Costco markup is so high is still unknown. It’s believed that it has something to do with the fact that the two companies haven’t worked out a deal yet.

Costco makes a lot of its money through customer memberships. When Instacart shops for a customer, Costco loses out on a potential subscription.

The membership fee is thought to be another reason that the markup is so high for Costco, as it tends to sit around $60 to $120 a year per customer.

The markup covers some of the cost of membership. However, the markup profits go to Instacart, not the Instacart employee who has the membership.

Are Aldi Prices Higher on Instacart?

Aldi prices, similarly to Costco prices, are marked up when you shop at Aldi through Instacart.

However, you won’t typically see a large markup. In fact, many of the items are the same price as if you went there yourself.

The Aldi prices through Instacart aren’t always higher than shopping without the delivery service. If you’re worried about whether or not you’ll have to pay more, you can look through your order as you place items into the virtual cart.

To address concerns about over-payment, Instacart finally added a feature that shows whether or not you’re paying more.

The problem is that it won’t tell you that percentage. Instead, they only tell you if the price is the same as the store’s regular price. For prices that aren’t the same, you’d have to do your own calculations to find out.

Certain bulk items and gift cards aren’t available when you shop at Aldi via Instacart. Alcohol is also not able to be delivered in certain states as well.

You’ll receive a notification if an item isn’t eligible for delivery. In most cases, the vast majority of items are fine to purchase through Instacart.

What is the Instacart Pick up Fee?

Instacart also allows you to place your order and pick it up curbside at eligible stores.

If you’re a premium member, you don’t have to pay any additional fees. However, non-members must pay an average of $4.99.

The pickup fee can change from store to store, so make sure you review the details before you place a pickup order.

Want to become an Instacart premium member? That’s an annual fee of $99. So you’d need to use Instacart 20 times over the course of a year to make that worth it. But if you’re doing weekly grocery shopping, that fee will pay for itself in under 6 months.

Final Thoughts

Instacart offers fantastic convenient, but at a price. Check their website to see whether or not you’ll be charged a markup based on the store you’re shopping at.

In this article, we took an in-depth look at how their pricing works. From service fees, membership charges, and preferred partner stores.

But ultimately we answered the question of “Why Does Instacart Charge More Than the Store?” with the answer that they don’t always charge more.

In fact, they only charge more (an average increase of 15%) when you order from one of their non-partner stores.

So, with an average price increase of 15%, you might want to think about trying a partnered grocery retailer like Whole Foods if you’re using Instacart for grocery delivery.

New to Instacart and wondering how Instacart grocery pickup works?

I cover everything you need to know in a recent article.

I break down how to use it, what to expect, how long it takes, and even whether it’s possible to use coupons when you shop using Instacart.

Just click that link to read it on my site.

Of course, the big perk of grocery delivery or pickup is not having to fight the crowds down the aisles at your local grocery store. 

But the biggest plus of not having to go to the store is the constant hassle of stores changing the store layout.

If you’ve ever wondered why grocery stores change the layout, I cover that in detail in a recent article. And the answer isn’t what you probably think.

Just click that link to read it on my site.

Ready to start ordering from Instacart?

CLICK HERE to go to the Instacart order page.

Photo credits which require attribution:

Instacart_PwG_anim_02 by 姿穎 呂 is licensed under Public Domain

Sources:

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Jeff Campbell
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