Instacart Was Charging Wildly Diverging Prices for Different Shoppers, an Investigation Found—So I Checked My Costco Orders

The U.S. government may have minted the last penny last month, but Instacart’s algorithms are still fighting for every last cent.

While shoppers have grown accustomed to prices ending in .99—a psychological trick as old as the cash register—Instacart (CART) users like me see something different: $4.17 for eggs, $17.37 for Nature Valley bars, $11.43 for basil pesto. The company’s pricing shifts seemingly every time you log in, with price changes down to the penny.

A major investigation published this week suggests just how far Instacart’s pricing precision has been taken. Consumer Reports and Groundwork Collaborative found that Instacart has been running AI-powered pricing experiments on millions of shoppers, charging customers different prices for identical items at the same stores, sometimes as much as 23% extra.

I reviewed a year’s worth of my own Costco Wholesale (COST) orders through Instacart and found the same pattern—double-digit price swings on items I buy regularly, with no obvious explanation. (More on that below)

What the Investigation Found

CR and Groundwork Collaborative recruited 437 volunteers across four cities to shop on Instacart for identical items at the same stores simultaneously. Three-quarters of the products had different prices for each user. The average shopping basket varied by about 7%—a difference that CR estimated could cost a family about $1,200 a year.

The retailers affected included Costco, Kroger (KR), Target (TGT), Safeway, Albertsons (ACI) and Sprouts (SFM).

The practice, known as surveillance pricing, appears to go back to Instacart’s 2022 acquisition of Eversight, an AI pricing company. In the company’s 2023 shareholder letter, Instacart described one of its tools, “smart rounding,” as “a machine learning-driven tool that helps retailers improve price perception and drive incremental sales.”

With surveillance pricing, algorithms set individualized prices based on your customer data, often without your knowledge. Unlike a price tag or a coupon, it’s invisible—two people can see different prices for the same item simultaneously and not know it.

It’s also tricky for outside analysts to prove it’s being used, but the CR investigators caught a lucky break. Costco accidentally forwarded an internal Instacart email confirming that “smart rounding” experiments were underway between the companies. After its investigation was published, Instacart said it had stopped running pricing experiments at both Costco and Target.

But Instacart has stopped short of saying it was using algorithms based on specific individuals. “These tests are not dynamic pricing—prices never change in real-time, including in response to supply and demand,” an Instacart spokesperson told Investopedia. “The tests are never based on personal or behavioral characteristics—they are completely randomized.” 

But a disclosure Instacart shows its New York customers tells a different story. Under the state’s Algorithmic Pricing Disclosure Act, which took effect Nov. 10, the company must tell its users if it engages in the practice. As such, its app notifies New York users that “certain prices and/or fees may vary based on randomized tests,” “we use personal information (such as delivery address) to calculate fees, and “this price was set by an algorithm using your personal data.”

What I Found in My Own Orders

My family orders from Costco through Instacart almost every other week, so I pulled a year of receipts to see whether the same kinds of price swings showed up in my own history.

They did: The price I paid for Kirkland thick-sliced bacon ranged from $14.75 to $17.59, a 19% jump for the same product. Kerrygold butter swung even more, from $11.58 to $17.58, a 52% difference. Even a pantry staple like Kirkland basil pesto moved between $10.37 and $11.43.

Not everything shifted. Bananas stayed anchored at $1.63–$1.64 all year; Costco’s famed $4.99 rotisserie chicken rang up as $5.46 throughout the year on Instacart with its extra fee. But the items with the biggest swings were the same as those CR flagged: branded staples and higher-margin products such as eggs, olive oil and blueberries.

Price changes over time are normal—after all, grocery prices rose about 2.7% over the past year. But the CR investigation worked by having volunteers shop simultaneously, exposing how people were getting different prices for the same goods as the same time. Like other customers, I can’t replicate that just with my own receipts and reviewing prices over time at my local store, which makes it almost impossible to separate ordinary price changes from algorithmic testing.

And that’s the point: Instacart is marketed as a convenience. Few people have the time or the data-wrangling skills to untangle whether a price hike is a seasonal shift or part of an AI-driven experiment running quietly in the background.

How Instacart Explains Its Pricing

You have to dig for the scant details Instacart provides on the prices it adds to your bill beyond its service fee for each delivery and your annual membership costs for both Costco and Instacart. At the top of each retailer’s Instacart page, there’s a small link called “Pricing & Fees.” Clicking through pulls up a brief disclosure: retailers may charge more on Instacart, and a flat percentage markup is added to cover Instacart’s service.

What the policy doesn’t say is how big that markup is or who sets it. When journalists have asked where the prices come from when you buy items from Costco through Instacart, the companies have pointed the finger at each other. Instacart has said, “each of our retail partners sets the prices.” Costco has said the opposite: “Pricing above and beyond our walk-in warehouse price is set by Instacart.”

Instacart’s own terms of service add another wrinkle, noting that the company may vary fees based on demand, order attributes or other factors—language that reads very differently after the investigation into its algorithmic pricing experiments.

What’s Next for Surveillance Pricing

Lawmakers are taking notice. This week, Senator Ruben Gallego (D-AZ) introduced the “One Fair Price Act,” which would ban companies from charging customers different prices based on their personal data.

“Experimenting with people’s hard-earned money to see just how much you can get them to pay for food for their family isn’t fair pricing,” Jane Garza, Gallego’s spokesperson, told Investopedia. “And with AI making surveillance pricing easier and faster, it’s only going to get worse.” 

California, Colorado and Pennsylvania are also considering legislation that goes beyond New York’s notification requirement, banning surveillance pricing outright for certain retailers. For now, shoppers in the other 49 states are left to read the fine print—and wonder what it’s not telling them.