Delivery

Lawmakers Ask FTC To Examine Instacart, Delivery Platforms Tipping Protocols

US Lawmakers Ask FTC To Examine Tipping Practices On Instacart And Other Delivery Platforms

After reports that eCommerce delivery platforms are allowing consumers to “tip bait,” four U.S. senators are asking the Federal Trade Commission (FTC) to look at “potentially unfair and misleading” tipping practices on Instacart as well as other services. In a letter to FTC Chairman Joseph Simons, U.S. Senators Brian Schatz, Sherrod Brown, Chris Van Hollen and Elizabeth Warren cited reports that consumers have been able to provide a high tip to encourage a shopper to take an order only to decrease the tip — or offer no tip — after the order is finished.

They wrote in the letter, “Shoppers choose which orders to take based on the expected compensation, which is largely driven by the estimated tip. By permitting customers to ‘bait’ shoppers with high tips that are then revoked, online delivery services facilitate the deception.”

In a letter to Instacart Founder and CEO Apoorva Mehta, the senators wrote, “Shoppers risk their health and safety in order to deliver groceries and other goods to people who are sheltering in place — they should be able to count on reasonable compensation for that risk. However, according to news reports, some customers are deceiving shoppers by promising a large tip, only to unfairly reduce it or zero it out completely after the order is complete.”

They also noted that individuals are encountering economic hardship without precedent due to the coronavirus health crisis and “we hope online delivery companies like yours are taking the necessary steps to protect shoppers and prevent unfair and deceptive practices.”

Instacart said in a statement, “Our goal is to deliver a high-quality experience for both customers and shoppers. By allowing customers to tip after delivery based on their overall service, we see shopper tips increase or stay the same on 99.5% of orders. Additionally, since the beginning of the COVID-19 outbreak in North America, shoppers' earnings from tips have nearly doubled. Tips are always separate from any Instacart earnings and all tips go directly to the shopper.”

In separate news, Instacart has added a safety app to make sure its shoppers are kept safe amid the coronavirus health crisis. The company has teamed with ADT Inc. to connect shoppers to emergency services.

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The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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