Why Does Instacart Charge a Service Fee?

If you’ve had Instacart deliver your groceries, you may be wondering why they charge you a service fee.

Your groceries may already be marked-up depending on the store you used. You are likely paying a delivery fee. And you may be paying a tip to the delivery driver.

So why is there an additional service fee?

According to Instacart, the service fee helps support the Instacart platform. Additionally, it covers operating costs like insurance, background checks, and customer support. An additional fee is charged for ID verification and to ensure compliant delivery of alcohol products if ordering alcohol.

When you order from a food delivery service, whether it is groceries or take-out, several fees are included. And those fees can really add up. According to this TechCrunch study, food delivery can cost up to 40% more than a restaurant’s list price for their food.

I’ll go into more detail regarding the service fee Instacart charges, as well as other fees charged below. I’ll also give you some tips on how to minimize the fees you pay.

What Are the Different Fees Instacart Charges for Delivery?

Several factors are involved in determining which fees you are charged and how much. Here are the main fees charged by Instacart and how they vary.

I’ll discuss Instacart Express a little later, but I’ll note any differences under each fee below.

Please note that these are the fees and prices at the time this article was written. I will do my best to keep it up-to-date but be aware they may be different and change over time.

Instacart Service Fee

The standard Instacart service fee starts at 5%. However, there is a $2 minimum for smaller orders.

This fee covers operating costs, including shopper operations, insurance, background checks, customer service (Instacart Care), and the Instacart platform.

The fee used to be optional but is required now and applies to non-alcohol items.

If you are an Instacart Express member, the service fee starts at 1.9%.

There are no service fees for pickup orders. And keep in mind that service fees are not a tip.

Alcohol Service Fees

If you order any alcoholic beverages, an additional alcohol service fee is charged.

This fee covers costs associated with ensuring compliant delivery of alcohol products and ID verification.

The fee varies based on the cost of alcohol products you purchase:

Like the service fee, there is a reduced fee for Instacart Express members (40% of the regular alcohol service fee):

There are no alcohol service fees for pickup orders either.

Delivery Fees

Delivery fees may vary depending on the size of your order and when you want it delivered.

If it is during a busy time, the delivery fee will be higher, which will be apparent when choosing your delivery timeframe.

For orders over $35, delivery fees start at $3.99. For orders under $35, delivery fees start at $7.99.

If you are an Instacart Express member, delivery fees are waived on orders over $35.

Additionally, there is a minimum order amount (usually $10) to have your order delivered.

Heavy Fee

An additional fee is charged if the combined weight of heavy items, like cases of water, is over 50 pounds.

If you see a heavy fee in the subtotal when you checkout, you can click on Review to see which items it applies to and remove them if desired.

Taxes and Other Fees

Several other fees may appear in the subtotal when placing an order. You may or may not see these fees depending on where your store is located or where your order is being delivered.

Sales Tax

Sales tax will be applied to applicable items according to local laws.

Bottle Deposit

Some areas may require a fee, based on state or local laws, on bottles, cans, and other recyclable containers. This fee is usually based on the store location.

Bag Fees

Some jurisdictions require a fee to be charged for the use of non-reusable bags. Like the bottle deposit, it is based on the store location.

Sugar-Sweetened Beverage Fees

Another fee that may apply to certain jurisdictions is an additional tax on sugary beverages. Again, this additional fee is based on the location of the store.

Tip

A default tip of 5%, with a minimum of $2, is included for each delivery order.

The tip is optional and can be changed up to 24 hours after delivery. However, I recommend you tip your Instacart driver based on the service they provide.

Pickup Fee

Some stores charge a fee for pickup as well. It can be up to $4.99, but I find it to be $3.99 at most stores that charge it.

This fee is charged because even though you aren’t getting your groceries delivered, there is still an operational cost for pickup. Someone still has to gather your groceries and pay for them, so they are ready when you arrive.

This fee is waived for Instacart Express members.

What is Instacart Express and How Much Does It Cost?

Instacart Express is a paid membership that is ideal for people who use Instacart frequently.

It costs $9.99 for a monthly membership or $99 for an annual membership.

Benefits of Instacart Express

Instacart Express may help you save money if you use Instacart several times each month. Benefits include:

• Unlimited free delivery on orders ≥ $35
• Lower service fees – starting at 1.9% vs. 5%
• 40% lower alcohol service fees
• No busy pricing fees

If you use Instacart frequently, you should evaluate whether or not Instacart Express can help save you money.

Is Instacart Express Worth It?

If you have groceries delivered two or more times a month, it will likely save you money on the monthly plan.

Assuming you place two $35 orders each month, you’ll save $7.98 in delivery fees and $2.17 in service fees, or $10.15 total – more than covering the $9.99 monthly plan. Any larger or additional orders will result in even more savings.

If you opt to pay for the annual plan, you will realize savings starting with the 20th delivery assuming each order is $35. If you place larger orders, you’ll recoup the cost of the annual plan even quicker.

Instacart Express is worth it if you have your groceries delivered at least twice each month. This savings is in comparison with non-Express member deliveries, not with shopping for groceries yourself or picking up Instacart orders at the store.

However, if you’re unsure how often you’ll use it, you may want to try out the monthly plan first.

How to Minimize Instacart Service Fees and Other Fees

While it is challenging to avoid all Instacart fees, there are ways to minimize them.

1. Buy More

Buying more doesn’t typically sound like a good tactic for minimizing fees. However, because of how Instacart fees are structured, there are times when purchasing more groceries can help you save on the fees.

Spend At Least $35 To Save On Delivery

By spending a minimum of $35, you’ll avoid higher delivery fees on standard Instacart deliveries. In fact, you’ll typically save $4 just by going over $35 on your order by reducing the delivery fee from $7.99 to $3.99.

Additionally, if you are an Instacart Express member, you’ll receive free delivery on all orders over $35.

Spend At Least $40 To Save On Service Fees

For non-Express members, you’ll be charged a 5% service fee on orders, unless that fee is below $2. The minimum fee is $2, so for any order less than $40, you’ll be paying a service fee of over 5%.

While this savings isn’t going to be much, it is just another way to save a little by meeting that minimum order amount.

2. Adjust Your Alcohol Order

Because of the tiered alcohol service charges, you may save a couple of bucks by adjusting your alcohol order.

If you are just over the cut-off for a lower alcohol fee, you could save yourself $2 or $4 by selecting a different brand or a different quantity of the same brand. It could also be buying a case of cans instead of bottles.

Just be aware of how this may affect your overall order. If you are only ordering alcohol, don’t lower your order just below $35 to save $2 on the alcohol service fee. Your delivery fee will go up by $4, resulting in you paying $2 more instead of saving money.

3. Choose a Different Store

While I didn’t get into this earlier since it isn’t a fee you can see, Instacart marks up the prices of groceries at some stores. You won’t see a markup at all stores, but you will at some.

When you click on a store in the Instacart app, look under the store logo. It may state “Everyday store prices” or “View pricing policy” or “Higher than in-store prices.” You can click on “More info,” and it will provide additional details related to any markup.

Additionally, keep in mind that some stores charge a fee for pickup, while others do not. You can check this by going to the checkout in the app and checking for any fees next to the pickup times.

4. Join Instacart Express

You can save on delivery fees, service fees, alcohol service fees, and pickup fees by being an Instacart Express member. And if you use it frequently enough, it will pay for itself.

For more details on Instacart Express, see the section devoted to it above.

5. Do Your Own Grocery Shopping

While having your groceries delivered is convenient, it does come with several additional fees.

You need to weigh the value of the time you’d spend at the grocery store vs. the cost of having your groceries delivered to determine if it is a smart use of your money.

But in the end, the only way to avoid all of the fees is to do your grocery shopping on your own.

Related:
Can Instacart Pick Up Prescriptions

Summary of Instacart Service Fees

As you can see, there are several fees involved with Instacart. While fees are required for any service, there are ways to minimize them.

However, keep in mind that Instacart is a business, and they are in business to make money. Fees help them cover operational costs, as well as make a profit. You may disagree with the fees charged, but you always have the option of not using the service.

Have you wondered why Instacart charges more than stores and charges service fees? Please share your experiences in the comments.