In the height of the pandemic, grocery delivery behemoth Instacart dealt with “tip-baiting” or a gross tactic in which customers baited shoppers with a big tip, and then reduced said tip to zero after they received groceries. Instacart then alleged that less than 0.5% of orders have tips removed post-delivery, but then introduced a series of new policies, including required feedback if a tip is removed, deactivation of customers who consistently remove tips and reduction in the tip-adjustment window from three days to 24 hours.
Today, weeks after announcing a new SaaS-focused business model amid a slashed valuation, the delivery unicorn is introducing another protection for shoppers. Per a press release, Instacart is rolling out a tip protection service to give its shoppers more reliable access to their tips.
The protection will see Instacart protect shoppers from customers who remove a tip without reporting an issue with an order. Instacart says it will cover the amount of the zeroed-out tip up to $10. “While having a tip zeroed out after delivery is exceedingly rare, Instacart wants to ensure that shoppers are supported in the event that this happens,” the company said in a statement. It’s unclear how the company landed on $10 as the ideal tip; when a percentage may be more effective if shoppers with massive orders lose out on their tips post-delivery. For what it’s worth, Instacart said that the number of orders that have tips removed post-delivery has steadily declined.
Instacart’s update may be its latest attempt at appeasing shoppers, which have been on strike for years against the company’s low pay and lack of communication.
Tips have been a particularly tense topic, with some workers demanding to make the default tip at least 10% of a customer’s total bill — up from the current 5% default. The tipping protection scratches at this worry by affording more reliability to tips that may be taken away, but doesn’t get into the heart of making higher earnings a more automatic feature within the app. When asked if there are any future plans to increase the tipping default, Instacart pointed to its efforts to prompt customers to consider increasing their tips:
“We’re also prompting customers to consider increasing their tip anytime they rate a shopper 5 stars, as another way of recognizing great service from shoppers who go above and beyond. Shoppers have seen a 6% average increase in their earnings from tips on eligible orders as we’ve piloted this feature over the past few months,” the company wrote in an e-mail to TechCrunch. “At checkout, if the customer opts not to leave a tip, we’ll encourage them to consider adding one to recognize their shopper’s hard work. In testing, this feature has resulted in a 12% average reduction in customers choosing not to leave a tip.”
Along with new tipping protections, Instacart also shared the launch of multistore batches, which lets shoppers select batches that include multiple store locations. A spokesperson explained that a shopper can accept a batch that includes orders from two customers at two different stores, and then only take one trip across town to maximize time spent earning money.
The company is certainly on a journey toward reinventing itself, so getting in good graces with shoppers may prove smart. Co-founder Apoorva Mehta left his post as chief executive of Instacart in July, to be replaced by Facebook executive Fidji Simo. Her rise to chief executive came as the pandemic winds down and parts of the world begin to reopen, a crucial moment for the company to rethink how it conducts business.
Under Simo, a few executives have left including the head of payments and the head of talent. The company announced recently that it’s creating a service that includes e-commerce support for online grocery stores, fulfillment help for deliveries, advertising tech for digital retail, analytics and some in-store tech support.