Is Instamart giving you delivery savings, or holding your money hostage?
Instamart isn't trying to make money on your next order. It's using a clean behavioural design move to make sure you have a next order at all.
A year ago, Blinkit and Instamart were neck-and-neck on order frequency. Today, Blinkit is half an order per user per month ahead.
This wallet trick at checkout is what Instamart is doing about it. If your cart is between ₹120 and ₹198, you can add the exact shortfall to ₹199 to your Swiggy Money wallet to get free delivery.
At a ₹160 cart, paying ₹40 feels like a 25% fee/loss on the basket. Many of us drop off. This wallet deposit converts users who would have walked because it feels like a transfer (Prospect theory).
Once the money's in the wallet, it builds a pre-commitment. And Instamart desperately needs pre-committed customers.
Instamart's frequency has collapsed by 23% from the peak. The cliff happened in one specific quarter, Q4 FY25, when its MTUs surged 40%. Blinkit added even more absolute users in the same quarter but their frequency didn't budge. Both companies onboarded a wave of newbies. Only one of them got those users into a habit.
Instamart is forcing a return visit to demonstrate value and build the habit retroactively. You can't show new product categories to users who aren't opening the app. Frequency is the upstream variable. The wallet trick is how Instamart is engineering frequency to repair what their growth playbook hasn't.
There's a bigger catch buried in how the wallet works. The money already sitting in it doesn't count toward your next order's free-delivery threshold. Only NEW money you add at that checkout does.
You can't maintain a minimum balance as delivery insurance. I can never use existing wallet money AND get free delivery on the same order. It's either-or. Add more, the wallet grows. Use what's there, I pay delivery on the way out. Swiggy wins both ways.
Whether this works long-term depends on something deeper.
Are users coming back because they want to, or because they have money stuck in a wallet they didn't intend to fund, redeemable only by accepting a fresh delivery fee or adding even more? Only the first is loyalty.