
Instacart: We're Sorry - apoorvamehta
https://www.instacart.com/blog/2013/04/02/we-are-sorry
======
georgemcbay
If any company I did business with changed the terms of the business such that
I would be charged when I previously wasn't, and then they automatically
charged me, I'd be absolutely livid, regardless of whether they sent me an
email (that may or may not be sitting in the bottom of a spam folder) or not.

I don't think they should be on the hook for providing people with free
service that costs them money if they need to change the terms, but it should
be 100% manual opt-in (with people who don't opt-in having their service
canceled) if it involves a price increase or wholly new charges where there
were previously none.

Based on the fact that their apology seems centered around the email bug and
not the initial premise of adding charges without users having to opt-in to
them, I have to disagree with some of the comments here that this proves they
"get" customer service.

~~~
chc
I see it the opposite way — I do not want my service arbitrarily canceled just
because I didn't see an email sitting in the bottom of my spam folder. Unless
we're talking about some exceptionally expensive service here, any plausible
price increase is unlikely to be more upsetting than total loss of a service
that I apparently considered worthwhile in the first place.

IMO, the best thing is to grandfather people in. The next best thing is to
just let people know what's going on, move them over and offer a refund if
they are dissatisfied with the new plan.

~~~
kaoD
One does not simply change the conditions of a contract.

~~~
chc
Of course not. That's why you put in the contract that you can raise prices
with 30 days' notice.

~~~
JimWillTri
So you believe a company can charge $99 for a yearly service and then say "by
the way, we may increase prices in 30 days if we decide to do so." So what
happens to the $99 I paid?

They breached the contract by charging the additional fees. A company can't
change the terms and say "whoops, that plan didn't work better start charging
for small orders."

~~~
chc
> So you believe a company can charge $99 for a yearly service and then say
> "by the way, we may increase prices in 30 days if we decide to do so." So
> what happens to the $99 I paid?

Uh, it would still be paid? Price increases only apply to new billing cycles,
not retroactively, so I don't understand what you're getting at here.

The point is that it's incredibly easy — and relatively standard — to
incorporate the possibility of changes into a contract.

------
ruswick
This is an excellent piece of strategic PR inasmuch as it refocuses the debate
on the email issue (as is evidenced by the below posts), and obfuscates the
real issue, which is that Instacart changed the terms of service and proceeded
to charge people, something to which they never consented. Whether or not
Instacart bothered to inform their customers about this fact is irrelevant;
they shouldn't have done it.

From a customer standpoint, their actions are appalling and the apology is
obviously unfulfilling and fails to recognize or rectify the true issue. But,
from a business standpoint, this post is very strategic and effective at
mitigating public outrage. Although I'm still upset by the choices that
Instacart made, I can't help but appreciate the effectiveness of their
response tactics.

~~~
SilentStump
For some reason this strikes me as the rule "it's better to ask for
forgiveness than ask for permission." If I'm being pessimistic, I would assume
they decided to automatically opt users in, charge them, and create this
hubbub and just apologize about it later. However, the good person in me
decides to believe that they are sincerely apologizing for a bug.

~~~
smegel
I don't think that rule applies to credit card thieves.

------
ajju
Less than 4 hours after finding out about the issue here's a complete
explanation of what happened, a public apology, and an appropriate fix. This
is good customer service.

~~~
chollida1
> Less than 4 hours after finding out about the issue here's a complete
> explanation of what happened, a public apology, and an appropriate fix.

Or it indicates that they knew about it before hand and were working on it.
Either way, I agree with you. Good customer service.

~~~
angryasian
good customer service would have been to notify their customers every time
they are going to charge against their card vs having to have the customer
monitor explicitly what charges instacart is making.

~~~
tptacek
They made a mistake. They admitted it. Your argument is an appeal either to
time travel or omniscience. It is hard to understand what you expect from them
at this point.

~~~
wilfra
They admitted (claimed?) they had a bug and apologized for the bug. They
didn't acknowledge the real mistake: converting people from free to paid
without their explicit approval (not just emailing them altered terms). That
needed to be opt-in, not opt-out.

It appears as though they haven't even rectified that. It's still opt out.
They're going to email 71 customers asking if they want a refund. What if they
don't respond? No refund, right? What about the people who got the first email
but didn't cancel, they still get charged, right?

I would find it difficult to trust any company with my credit card info if I
knew the only thing standing between me and new charges for things I don't
want was reading every email they send me.

~~~
tptacek
They acknowledged exactly that, reversed the charges, and offered a full
refund. I am again left wondering what you actually expected them to do.

~~~
gus_massa
I don't understand the situation of the other n-71 users. Instacart send an
email to them, but apparently the users didn't have to confirm the upgrade.

What happened with the mails that got lost, went to the spam folder, where
ignored because it looks like standard press release, went to the secondary
mail account?

~~~
calebio
There was a post by someone who seems to have worked there claiming the
mistake was when they were querying for the users to send the email to.
Basically 71 of us were not included in the results of that query so the email
was never actually sent to us.

------
guiseppecalzone
Instacart is one of my favorite services. I use them every week. I want them
to build a sustainable business and last forever, since I never want to visit
a grocery store again.

When I saw this on HN this morning, my reaction was that it's easy for things
to get missed in the chaos of startups.

Remember, these guys run a startup. They're juggling a million things,
including a company that's growing fast due to high demand. These things will
happen. It's how the team deals with issues like this that will make them a
great company.

~~~
jacalata
"They're a startup, things will go wrong" is a valid argument to use for
anyone not charging things to my credit card.

~~~
guiseppecalzone
Sprint makes credit card errors all the time. It's business as usual.

Instacart makes a mistake and writes an apology on its company blog. I wish I
lived in a world where there were more Instacarts and less Sprints.

People are fallible. Companies are fallible. The real indication of character
is what they do to fix things when they go wrong.

~~~
mbrameld
This isn't a credit card error. This would be like signing a contract with
Sprint for 500 minutes a month for $20, getting charged the $20, and then
being charged an extra per-minute fee that wasn't in the contract.

~~~
res0nat0r
Kind of like when you get your latest Comcast bill, Sprint bill, natural gas
bill and see that "effective $DATE we will be increasing our price by $X% due
to $Y". Happens all the time unfortunately.

~~~
mbrameld
It doesn't happen like that though. Natural gas, sure. Power bill, definitely.
I've never had natural gas or electric service where I entered a contract for
a service at a fixed price. My cable and cell phone service are on a contract,
they can't increase the cost during the contract period.

------
kaoD
Never, never, never, NEVER, NEVER, NEVER EVER charge people when they didn't
explicitly agree to the charge.

    
    
      NEVER.
    

This is a huge NO-NO for any business. Big red flag. Stay away from Instacart.

~~~
tomash
They'll probably learn it themselves after a first wave of chargebacks.

------
Diamons
Wait, so you knew about the 71 emails not being sent and did nothing? Also, I
find it hard to believe it was only 71 emails because of the number of
complaints I saw in the original thread, unless the majority of your customers
are HN members.

~~~
mmmmax
What happened is that we made a mistake querying for the email addresses,
causing us to miss a group of the first people to sign up for Instacart
Express. This skewed heavily towards HN members. We knew a few people had been
missed (because they emailed us after seeing the charge, and said they didn't
get an email) but not why or how many.

~~~
random42
I am checking out instacart, and a popup is being thrown on my face to
register/login without the option to dismiss it! Seriously, WTH? This is
beyond bad design, when your design is to extort the emails registration out
the users. Not impressed.

------
magicseth
This fix seems a little lackluster. It would seem more upstanding to honor the
agreement they had made, and collected money for: i.e. let the 71 users
continue the delivery-fee-free plan (with no minimum) for the end of the term.

~~~
tptacek
It does not seem reasonable for a tiny startup to accept an unbounded downside
risk just for PR purposes. The refund they're offering is fine.

~~~
fnordfnordfnord
No, Instacart made an agreement which they need to honor more faithfully. If
the 71 customers had decided to change the terms of a business agreement
similarly, their accounts would probably be closed and referred for debt-
collection.

The fact that Instacart is a tiny startup has no bearing on whether they
should honor their agreements.

~~~
robryan
What is the agreement that they are honoring in this case? They didn't have a
plan for further $35 subscription, people were either moving to the more
expensive subscription or canceling.

Allowing the customers who weren't aware to retrospectively cancel and also
keep any value of the service they already used seems fair.

~~~
fnordfnordfnord
> First, we’re going to refund all delivery fees paid by the people affected
> by this bug.

I think I misunderstood that the first time, or just plain missed it. I'd be
okay with it as long as what I quoted above means what I think it means.

------
magikbum
> If there is anything else we can do - please let us know:
> happycustomers@instacart.com or (910) 817-2278

I wonder what it is like to be really upset and then email an alias called
happycustomers when you really aren't happy.

~~~
trhtrsh
It's incredibly annoying and offputting, much like when Tech/Billing Support
at my phone company plays hold "music" filled with cross-sell/up-sell
advertising.

------
tomash
Offering a refund after asking? Awww, how cute. But since a customer needs to
explicitly ask for returning money that she hasn't authorized taking, why not
just start a chargeback process at the credit card issuer?

Seriously, automatic refund should be their first and default action AND THEN
offering some kind of compensation for the inconvenience.

~~~
jlgaddis
Agreed. If I were one of the 71, I wouldn't bother requesting a refund. I'd
just call up the number of the back of my card and say "I didn't authorize
this charge."

~~~
timv
Why only the 71?

71 people got no notification that the charges were coming. That's terrible.

As far as I can tell, everyone else got an email saying "we're about to charge
you $99 unless you ask us not to". Not responding != authorizing

If I had any charges from Instacart relating to this mess I'd be claiming them
back (but I might be nice and give IC the chance to refund it first)

------
m2mapps
Kudos for the apology, unfortunately it took for this to go to the top of
Hacker News before an apology arrived.

------
Uchikoma
The also on HN Instacart post by a user says:

"Did not receive an email about this change of policy. Not only did I not
receive this email, neither did my wife nor a colleague, who also is a
Instacart Express user."

\+ in this thread "A few days ago, my gf started complaining about some sort
of $3 extra charges she noticed."

This makes the 71 user remark looking suspicious, except the 71 were based on
some geographical selection error.

~~~
benatkin
That does sound suspicious. I thought there were 71 total who bought the deal,
but it does say "71 of these emails" which seems to indicate that it's a
proper subset of the total emails that were to go out. It seems like an
unusual coincidence.

Another possibility would be that the selection was based on when the orders
were placed, and that the three of them all bought it at the same time because
they decided together to buy it.

------
aeon10
I think this is a really good response from Instacart. Heroku could learn a
few things from them I suppose. But again, good response from the Instacart
team. well done.

------
benatkin
As with Joyent and TextDrive's lifetime hosting, this company going out of
business is a valid solution to what they claim is an unsustainable promise
they made.

Reneging on their promises is not.

P.C. Hodgell - "That which can be destroyed by the truth should be."

In these cases I doubt that faithfully keeping the promises they made would
destroy either company. They just feel they can get away with it, and so they
break their promises to save some money.

------
saddino
Anyone who remembers Kozmo should know that the original pricing model is
doomed to failure. Grocery delivery doesn't scale well, and 14 years of
technological advancement doesn't change this fact.

------
beshrkayali
I can see that there are many different opinions about this, but I think this
raises an important question to startups that start free and plan to convert
into a paid service on how it should be done the right way, without upsetting
customers.

IMO, I think it depends on when they made these plans. If this was their path
from the beginning and the service was free for a specific reason, I think it
should be clearly pointed out on the website that the service is free for only
a specific period of time.

If the plan of charging customers was added later on (after customers stared
using the service), the solution would be to: definitely don't charge
customers without them opting in, even if you send them an email, even if you
wait for some days after to start charging. Changing customers to a temporary
"trial" phase would be a good idea I think. This way, customers will know that
they need to pay when they use the service the next time.

------
rocky1138
Off-topic, but if you're in the Kitchener/Waterloo Canada area and are looking
for an Instacart type service, try <http://www.grocerygateway.com>. I've been
using it for months and am quite happy with it.

------
kevingibbon
Good apology but I don't think its enough. Grandfathering the 71 people
wouldn't cost Instacart more than 10-20k.

There will still be a lot of people with a bad taste in their mouth. Public
perception to a service like this is key.

------
tvladeck
considering that this is coming as a _response_ to the fact that they charged
people without notice, it's not enough to _just_ refund the money (as that
option should have been available in the first place when they changed their
terms). making up for something like this requires that you go above and
beyond just "catching up" to where you should have been before. imo, since
this is coming after the fact, they should refund the money _and_ honor the
terms of the arrangement their customers thought they were getting into.

------
psionski
Why don't they let people see their website? When you go to their homepage an
ugly login box pops up in front of the content and you can't close it without
removing its DOM element... Even if you do, the site becomes non-functional,
you can browse the menus but they don't work... I'm not giving access to my
Facebook account to someone I don't know and I'm definitely not registering
just to check them out.

------
thejosh
Do you want to be charged $99? YES / NO

------
dmak
The right thing to do would be to grandfather those users and move them off
the plan by trying to upsell them in someway. This is an okay solution, but
I'm still tainted by the thought of arbitrarily changing terms instead of
grandfathering everyone.

------
ritonlajoie
IMHO Compagnies should not change their TOS just by sending an email. On
logging in the site, users should be updated, on the screen, with the new TOS
and should accept them.

That's what Apple does on the iOS devices and I find it acceptable.

------
tjbiddle
Well done. Always good to see a startup take real responsibility for their
actions.

------
rburhum
My gf started using Instacart and _I_ completely fell in love with it. A few
days ago, my gf started complaining about some sort of $3 extra charges she
noticed. Being a startup founder myself, I reminded her that they are trying
to build a sustainable business model because I absolutely _hate_ having to
deal with parking after going out for groceries. The word "parking" made her
switch her mind immediately. The truth is that changing pricing structure is
hard for any company, but I sincerely applaud what these guys are doing and
don't mind at all if I have to order more to make it a sustainable business. I
don't want another thing I liked destroyed by the silly Kozmo.com business
model.

~~~
tptacek
Yes, this: add to the fact that upward price moves will make your users revolt
_irrationally_ (that is, they'll revolt without considering whether any
substitutable good or service would be less expensive), but that you have to
execute the change perfectly to avoid transforming your customers into an
angry aggrieved mob. Bumping up prices is the Triple Axel of startup moves.

------
awayand
"we charged your credit card without your permission so we will keep the money
and continue charging you unless you tell us to stop" - lol WUT?

------
Systemic33
Relevant: <https://www.youtube.com/watch?v=9u0EL_u4nvw>

------
speedyrev
Somebody at Instacart read Hacker News?

~~~
jacalata
and responded in the thread, yes.

