The cost of convenience
Convenience seems to be the flavour of the week.
New services are popping up, letting you order everything from a ride to your buddy’s place to a burger and fries — and now, groceries, picked up for you and driven to your front door.
Of course, there’s a cost to all this convenience, sometimes a flat fee, a monthly membership, or perhaps a percentage.
So you should always read the fine print.
But sometimes the fine print isn’t so much fine as minimalist.
Two weeks ago, I wrote about the new home delivery service Dominion is offering shoppers near its five stores on the Northeast Avalon.
The same service was rolled out in Halifax last year and in other Canadian markets before that. It’s a partnership between Dominion parent Loblaws and Instacart, a U.s.-based leader in web and app-driven grocery home delivery.
The column described the basics of how it works, drawn from a news release, an interview with Loblaw and an emailed statement from Instacart. You go to the Instacart website, sign up, enter your postal code, then selected groceries from the menu. An Instacart shopper goes to the store, picks up your groceries and delivers them to your house within a prearranged time — as little as an hour in some cases. The cost: a $3.99 delivery fee for orders over $35. A $9.99-amonth membership gets you as many deliveries as you want. Sounds pretty good.
But after I wrote the column, I heard from some customers.
Paul and his wife Dianne read it and thought it would be worth giving Instacart a try.
“My wife was ecstatic,” Paul told me. “She said, ‘My 93-yearold mother, she’d love this. The fact you can pay $10 a month and have unlimited deliveries, what a great idea.’”
They went signed up, selected their groceries and waited.
Delivery was made and an emailed receipt from Instacart arrived in their inbox.
The first sign something was off came when they looked at the price they paid for a roast of beef — beef was on sale that week. The sticker on the roast read $57.09. On the Instacart receipt: $87.70. The chicken breasts? Sticker price: $9.53, Instacart price $18.15.
Huh?
“We went through and we had 19 items that we purchased. Of the 19, 17 of them were marked up,” Paul said. “The total bill that we received was $178.35 and the total pricing from the Dominion website, not the Instacart site, $136.11. Apart from the meat and chicken, everything was marked up from between eight and 12 per cent.”
Concerned, they called Instacart and were directed to the pricing policy on the website, which Paul described as being “inconspicuous.” It simply said Instacart prices “vary from instore prices.”
For Paul, that’s a bit too vague.
Eventually the couple received a refund from Instacart of the difference on the meat and chicken. After calling their local Dominion store, they eventually got a gift card in lieu of the difference on all their other purchases.
They won’t be using the service again any time soon. For them it’s a question of transparency.
“It’s not prominent, it’s not highlighted, you’ve really got to drill down and find it,” Paul said of the pricing policy. “It doesn’t say that there’s a markup, it just says pricing may vary. … Ultimately, they’ve probably got all their legal bases covered, but it’s just bad marketing.”
If you dig into the website there’s a little more info under the “Help” tab, although chances are you wouldn’t click on it unless you had other issues.
It reads: “Retailers set the prices of products available for delivery on the Instacart platform. In some cases, prices may be higher than in-store. Although Instacart may not honor in-store discounts we do offer excellent Coupons for select items.”
After I spoke to Paul I spent time in the next two weeks talking back and forth with reps from Dominion and Instacart, with calls and emails flying between St. John’s, Nova Scotia, Arizona and San Francisco. Eventually I got a clear explanation of how the pricing works.
First off, Dominion (not Instacart) sets the prices, and most items are marked up. The amount varies.
In-store sales are not included and if you’re a PC Optimum member neither your points nor your weekly sale offers apply.
Most of the groceries Paul and Dianne bought were marked up by eight to 12 per cent. But beef and chicken were on sale that week so the increase jumped a lot.
When I signed up for Instacart to check things out, striploin steaks were $14 a kilo in my weekly flyer. Between the markup and the no-flyer full price, they’d have cost me $36 a kilo if I’d bought them via Instacart.
Instacart says some of the companies it works with across North America choose to keep delivery prices the same as instore prices.
Dominion told me it opted to mark up prices because there’s an extra cost to them for using Instacart to offer the delivery service.
Mark Boudreau, Loblaw Atlantic’s director of corporate affairs, told me feedback has been mainly positive. And there’s been strong pick up of the service in some areas, like Halifax. But he can understand if customers question why the prices are higher.
“You raised a good point about customer expectation,” he said, “and I think there is room for us to work with Instacart, maybe, to provide the customer with a little more detail on what to expect when they get their delivery.”
That work is already happening.
Late Wednesday night I got an email alerting me to an update on the pricing policy on the Dominion page of the Instacart site.
It now says: “Dominion sets pricing. Item prices are higher than in-store prices in your area. Loyalty cards not accepted. Most in-store prices, sales, promotions., offers, couple and discounts do not apply. Instacart specific coupons, promotions and discounts available. Prices as displayed. Price adjustments may be made for item substitutions in weight or quantity.”
So, it may have taken a while, but that’s a lot more detail than your average fine print.
Just make sure you read it before you use the service.
Oh, and don’t forget to tip your shopper, too.