Instacart Fees Explained: Complete Breakdown for Customers and Brands 2025

Introduction to Instacart's Fee Structure

Instacart has revolutionized grocery shopping by bringing the supermarket to your door, but understanding the platform's fee structure can be confusing for both customers and brands. With delivery fees, service charges, price markups, membership costs, and retailer commissions all in play, it's critical to understand how Instacart makes money and how these fees impact your total costs.

This comprehensive guide breaks down every Instacart fee from both the customer perspective (what you pay) and the business perspective (what retailers and brands pay). Whether you're a consumer looking to save money or a CPG brand evaluating Instacart as a sales channel, this analysis provides the transparency you need.

Customer-Facing Fees: What You Pay as a Shopper

1. Delivery Fee ($3.99-$9.99 per order)

The delivery fee is charged on every order and varies based on several factors:

Standard Delivery Fee Tiers:

• Orders $35+: $3.99-$5.99 (standard rate)
• Orders under $35: $7.99-$9.99 (small order surcharge)
• Express delivery (2-hour or less): +$2-$5 premium
• Peak hour delivery: +$2-$4 (Sunday mornings, weekday evenings)

Factors that affect your delivery fee:

• Order size: Larger orders (more items/weight) may increase fees
• Distance from store: Longer delivery distances incur higher fees
• Demand and availability: Surge pricing during high-demand periods
• Retailer partnership: Some retailers subsidize delivery (Costco members often see lower fees)

How to reduce delivery fees:

• Order $35+ to avoid small order surcharge
• Choose longer delivery windows (not express)
• Avoid peak hours (Sunday 10 AM-2 PM, weekday 5-7 PM)
• Join Instacart+ for unlimited $0 delivery (see below)

2. Service Fee (typically 5% of order subtotal, or $2-$10)

The service fee is separate from the delivery fee and supports Instacart's operational costs:

How it's calculated:

• Default rate: 5% of your order subtotal (before tax and delivery)
• Minimum service fee: Usually $2 for very small orders
• Maximum service fee: Some markets cap at $9.99-$12.99 for large orders

Can you reduce the service fee?

• Yes: Customers can adjust the service fee down to 0% during checkout
• However: Instacart presents this as "supporting quality service" and applies social pressure
• Instacart+ members: Can set default service fee percentage (including 0%)

What the service fee covers:

• Customer support (chat, phone, refunds)
• Platform development and maintenance
• Shopper insurance and background checks
• Order accuracy guarantees

3. Price Markup (10-25% above in-store prices)

The hidden fee: Instacart often charges higher prices for individual items compared to in-store pricing.

Average markup by retailer:

• Costco on Instacart: 15-20% markup (plus Costco adds its own online fee)
• Kroger on Instacart: 10-15% markup
• Safeway/Albertsons: 10-18% markup
• Whole Foods (via Instacart, not Amazon): 15-20% markup
• ALDI on Instacart: 10-12% markup (ALDI already has low base prices)

Why the markup exists:

• Revenue sharing: Instacart and retailers split the markup (exact % varies by contract)
• Commission coverage: Helps offset Instacart's commission to retailers (see business fees below)
• Demand-based pricing: Customers value convenience and pay premium for delivery

How to identify markup:

• Compare Instacart prices to retailer's website or in-store
• Some retailers (Kroger, Safeway) show in-store prices on their own apps
• Use price comparison tools or browser extensions

Example markup calculation:

• In-store Kroger milk: $3.99
• Instacart Kroger milk: $4.49
• Markup: $0.50 or 12.5%
• On a $150 grocery order, 12.5% markup = $18.75 additional cost

4. Tip for Shopper (suggested 5-20%, adjustable)

Tips go 100% to shoppers and are separate from Instacart's revenue:

Default tip structure:

• Suggested tip: 5% of order total (some markets suggest 10-15%)
• Minimum suggested tip: $2 for very small orders
• Customers can adjust: Increase, decrease, or remove tip entirely

When should you tip more?

• Heavy items: Cases of water, 40lb dog food bags (15-20% recommended)
• Large orders: 100+ items or $300+ orders (10-15%)
• Difficult deliveries: 3rd-floor walk-up apartments, gated communities
• Bad weather: Rain, snow, extreme heat (add $5-10 flat bonus)
• Special requests: "Get the ripest avocados" or extensive replacements

Post-delivery tip adjustment:

• You can increase or decrease tips up to 24 hours after delivery
• Should increase if shopper went above and beyond
• Should decrease/remove if service was poor (wrong items, damaged goods, rude shopper)
• Note: "Tip baiting" (removing tips after delivery) hurts shoppers and is tracked by Instacart

5. Heavy Order Fee ($5-$15)

Charged when your order includes heavy or bulky items:

What triggers the fee:

• Items over 8 lbs per unit (gallons of milk, watermelons, pet food)
• Cases of beverages (24-packs of soda, water)
• Large bags (25lb rice, 40lb dog food)
• Total order weight exceeds 50 lbs

How it's calculated:

• $5 fee: 1-2 heavy items
• $10 fee: 3-5 heavy items
• $15 fee: 6+ heavy items or extremely bulky order

Where does this fee go?

• 100% to the shopper (labeled as "heavy pay" in shopper app)
• Compensates for physical labor and vehicle wear

6. Alcohol Order Fee ($3-$5, where applicable)

Some states/retailers charge additional fees for alcohol delivery:

• Age verification fee: Covers ID check requirements
• Alcohol handling fee: Retailer-specific (Total Wine, BevMo)
• State taxes: Alcohol excise taxes vary by state

7. Prescription Delivery Fee (varies, often $0)

Pharmacy orders (CVS, Walgreens, Rite Aid) may have different fee structures:

• Often $0 delivery fee (subsidized by pharmacy partners)
• Service fee still applies (5% of order)
• Insurance copays processed separately

Instacart+ Membership: Is It Worth It?

Membership Cost

• Annual plan: $99/year ($8.25/month)
• Monthly plan: $9.99/month
• Free trial: 14 days (occasionally extended to 30 days)

Membership Benefits

1. Unlimited $0 Delivery Fees

• On orders $35+ (standard delivery windows)
• Saves $3.99-$5.99 per order
• Express delivery still costs extra (+$2-$5)

2. Reduced Service Fees

• Can set service fee to 0% as default (save 5% on every order)
• Or set custom percentage (2%, 3%, etc.)

3. Exclusive Member Pricing

• Special discounts on select items (5-15% off)
• Early access to promotions
• Instacart+ exclusive deals (similar to Prime Day)

4. Credit Back on Pickup Orders

• Earn 5% credit on pickup orders (redeem on future deliveries)

5. Family Account Sharing

• Add household members to share membership benefits
• Each person gets separate account and payment methods

Break-Even Analysis: When Does Instacart+ Pay for Itself?

Annual plan ($99/year):

• Delivery fee savings only: Need 17-25 orders/year (assuming $4-6 delivery fee saved)
• With service fee reduction (5%): On $150 average order, save $7.50 service fee + $5 delivery = $12.50 per order
• Break-even: 8 orders/year or 1 order every 6 weeks

Recommendation:

• Definitely worth it: If you order 2+ times per month
• Probably worth it: If you order 1-2 times per month AND use service fee reduction
• Not worth it: If you order less than monthly or always combine with roommates/family to hit $35 minimum

Total Cost Example: What You Really Pay

Scenario: $100 grocery order (in-store price), non-member

• In-store subtotal: $100.00
• Instacart item markup (15%): +$15.00
• = Instacart subtotal: $115.00
• Delivery fee: +$5.99
• Service fee (5% of $115): +$5.75
• Tip (10% of $115): +$11.50
• Heavy order fee (case of water): +$5.00
• Sales tax (8% on $115): +$9.20
• Total paid: $152.44

Effective premium: 52.4% over in-store shopping

Same order with Instacart+ membership:

• Instacart subtotal (with markup): $115.00
• Delivery fee: $0 (Instacart+ benefit)
• Service fee (set to 0%): $0 (member benefit)
• Tip (10% of $115): +$11.50
• Heavy order fee: +$5.00
• Sales tax (8% on $115): +$9.20
• Total paid: $140.70
• Savings vs. non-member: $11.74

Effective premium: 40.7% over in-store (vs. 52.4% without membership)

Business-Side Fees: What Retailers and Brands Pay

1. Retailer Commission (15-30% of GMV)

Instacart charges retailers a commission on every order from their store:

Commission tiers by retailer size:

• Large national chains (Kroger, Albertsons, Costco): 15-20% commission (they have negotiating power)
• Regional grocers (Publix, Wegmans, HEB): 20-25% commission
• Small independent grocers: 25-30% commission (less volume, higher rates)
• Specialty retailers (Total Wine, Petco): 18-25% depending on category

How commission is calculated:

• Based on GMV (Gross Merchandise Value) = total customer order value before delivery fees
• Example: Customer orders $100 in groceries from Kroger on Instacart
• Kroger pays Instacart ~$18-20 (18-20% commission)
• Kroger keeps $80-82

2. Advertising Fees (variable, pay-per-click or CPM)

Brands and retailers can pay for premium placement on Instacart:

Ad Products Available:

• Sponsored Products: Pay to appear at top of search results or category pages
• Featured Products: Carousel placement on home page or category entrances
• Display Ads: Banner ads on app/website
• Coupons and Promotions: Instacart-exclusive digital coupons (brand pays for discount)

Pricing Models:

• CPC (Cost Per Click): $0.50-$2.00 per click (depends on category competitiveness)
• CPM (Cost Per Thousand Impressions): $10-50 CPM for display ads
• ROAS Target: Many brands aim for 3-5x return on ad spend

3. Instacart Connect (Shoppable Ads) - Brand Fees

CPG brands can pay to promote their products across Instacart's platform:

• Minimum ad spend: $5,000-10,000/month (enterprise brands)
• Self-serve minimum: $500/month for small brands
• Managed service fees (10-15% of ad spend for Instacart-managed campaigns)

4. Instacart Platform Access Fee (for retailers)

Some retailers pay setup and integration fees:

• Onboarding fee: $10,000-50,000 for large chains (catalog integration, training)
• Monthly platform fee: $500-2,000 for independent grocers using Instacart's white-label solution
• API access: Custom pricing for retailers building their own integrations

5. Payment Processing Fees (2-3%)

Standard credit card processing fees apply:

• Instacart processes payments on behalf of retailers
• Retailer pays 2-3% payment processing fee (same as if customer swiped in-store)

How Instacart Makes Money: Revenue Breakdown

Instacart's Revenue Sources (2024 estimates)

• Retailer commissions: ~55% of revenue ($7-8 billion annually)
• Customer fees (delivery + service): ~25% of revenue ($3-4 billion)
• Advertising (Instacart Connect): ~15% of revenue ($2-2.5 billion, fastest growing)
• Instacart+ subscriptions: ~5% of revenue ($600-800 million)

Gross Merchandise Value (GMV): $35-40 billion/year

Instacart's Economics Per Order

Average order example ($100 in groceries):

• Revenue from retailer commission (20%): $20
• Revenue from customer fees: $11-15 (delivery + service)
• Total Instacart revenue: $31-35 per order
• Cost of delivery (shopper pay + batch incentives): $15-20
• Platform costs (support, tech, insurance): $5-8
• Gross profit per order: $8-12
• Gross margin: 25-35%

Fee Comparison: Instacart vs. Competitors

Instacart vs. Amazon Fresh

• Amazon Fresh delivery fee: $0 for Prime members on $100+ orders (otherwise $3.95-$9.95)
• Amazon Fresh markup: Minimal to none (Amazon subsidizes for Prime loyalty)
• Amazon Fresh service fee: None
• Winner for fees: Amazon Fresh (if you're already a Prime member)

Instacart vs. Walmart+

• Walmart+ membership: $98/year (cheaper than Instacart+)
• Walmart delivery fee: $0 for members on $35+ orders
• Walmart markup: None (same as in-store EDLP)
• Walmart service fee: None
• Winner for fees: Walmart+ (significantly cheaper overall)

Instacart vs. Shipt (Target)

• Shipt membership: $99/year (same as Instacart+)
• Shipt delivery fee: $0 for members on orders $35+
• Target markup on Shipt: 5-10% (lower than Instacart's 15-20%)
• Winner for fees: Shipt (for Target shoppers)

Strategies to Minimize Instacart Fees

For Customers

1. Join Instacart+ if you order 2+ times/month (saves $150-300/year)
2. Set service fee to 0% (Instacart+ members can do this by default)
3. Order $35+ to avoid small order surcharge
4. Use pickup instead of delivery (no delivery fee, 5% credit back with Instacart+)
5. Avoid peak hours (Sunday mornings, weekday evenings have higher delivery fees)
6. Combine orders with household members to hit $35 minimum and split costs
7. Compare prices across retailers (Costco may have better base prices despite markup)
8. Stack with credit card rewards (Chase Sapphire Reserve gives 3x points on food delivery)

For Retailers

1. Negotiate commission rates (larger order volumes = lower commission percentage)
2. Use Instacart Platform for white-label delivery (own the customer relationship, lower fees)
3. Promote in-store pickup (no commission on pickup orders in some contracts)
4. Optimize catalog for searchability (reduce need for paid advertising)
5. Monitor pricing parity (ensure Instacart prices don't exceed website/app by too much)

For Brands (CPG)

1. Run promotions during high-traffic times (maximize reach without increasing ad spend)
2. Optimize product titles and images for organic search (reduce CPC costs)
3. Track ROAS closely (pause underperforming ad campaigns)
4. Use retailer-funded promotions (negotiate with Kroger to co-fund discounts)

The Future of Instacart Fees

Trends to Watch

• Advertising revenue growth: Instacart is shifting focus to ads (higher margin than delivery)
• Dynamic pricing: AI-powered surge pricing based on real-time demand
• Subscription bundles: Potential bundling with streaming services or meal kits
• Retailer negotiations: Large chains may demand lower commission rates as leverage
• Vertical integration: Instacart may acquire retailers or build dark stores to control margins

Conclusion: Understanding the True Cost of Instacart

Instacart's fee structure is complex by design—multiple small fees (delivery, service, markup, tip) make it difficult to compare total costs vs. in-store shopping. On average, Instacart orders cost 40-50% more than shopping in person when all fees are included.

For customers who value convenience and time savings, Instacart+ membership ($99/year) significantly reduces costs and pays for itself after 8-10 orders. For occasional users, the premium may not justify the convenience.

For retailers and brands, Instacart offers access to a $35+ billion GMV marketplace, but commissions (15-30%) and advertising costs must be factored into unit economics. Successful brands treat Instacart as a discovery and convenience channel, not a margin-driving sales channel.

Understanding these fees is critical for making data-driven decisions about how to engage with the Instacart platform—whether you're a consumer optimizing your grocery budget or a business evaluating Instacart as a growth channel.