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Instacart adjusts its tipping policy again to address tip baiting

<i>Frederic J. Brown/AFP/Getty Images</i><br/>An Instacart employee uses her cellphone to scan barcodes showing proof of purchase for the customer while picking up groceries from a supermarket for delivery on March 19
AFP via Getty Images
Frederic J. Brown/AFP/Getty Images
An Instacart employee uses her cellphone to scan barcodes showing proof of purchase for the customer while picking up groceries from a supermarket for delivery on March 19

By Sara Ashley O’Brien, CNN Business

Instacart is once again tweaking its tipping policy in a bid to address the effects on its workers of a practice known as “tip baiting,” where customers zero out a tip after an order is delivered.

The company said Tuesday that it will cover the cost of a shopper’s tip, up to $10, should a customer remove the tip after delivery without reporting an issue with their order.

The update is just the latest incremental measure Instacart has announced in recent years to address so-called tip baiting, while maintaining that it is an “exceedingly rare” event for its shoppers. Two years ago, CNN Business reported that some Instacart customers were bait-and-switching workers by offering up a large tip — sometimes $50 or more — and then taking it away after the delivery was dropped off.

As demand for Instacart skyrocketed in the early months of the pandemic, customers struggled to get time slots. Some resorted to tip baiting to entice Instacart shoppers, who are treated as independent contractors, to pick up their orders first but then removed the tip after delivery, leaving shoppers demoralized.

An Instacart spokesperson told CNN Business at the time that the vast majority of people were adjusting their tip upward or did not adjust their tip after delivery. Instacart also claimed that customers typically leave feedback if and when a tip is removed.

Two months after CNN Business’ report, Instacart announced several changes to its tipping policy including requiring feedback from customers who remove a tip entirely after delivery, and shortening the window of time customers are able to change a tip to 24 hours, down from the previous three-day window. While customers are still required to provide feedback when removing tips, unless they also report an issue with their order, a shopper’s tip — up to $10 — will now be protected.

The tip protection is one of several updates the company announced Tuesday aimed at supporting its shopper workforce, which more than doubled to 600,000 people during the pandemic. Other updates include prompting customers to add a tip if they haven’t left one, or to increase a tip if they rate a shopper five stars.

As CNN Business reported in late February, the pandemic demand has begun to stabilize and some shoppers are feeling the effects of that. Last month, Instacart announced a “renewed commitment” to its shopper community, teasing that it would unveil new product features in the coming months. It also announced several new services for grocers, including an offering to help retailers get in on the 15-minute delivery craze.

Alongside the announcements, the decade-old privately-held startup revised its valuation to $24 billion, down from its peak of $39 billion fueled by the pandemic boon to its business.

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