Walmart will pay up to $100 million to settle a complaint by the Federal Trade Commission (FTC) and 11 states alleging the company withheld tips and misrepresented wages to drivers who deliver orders as part of its Spark program.
The retail giant has already paid or will directly compensate up to $79 million to the drivers, including $16.2 million set aside to establish a “driver fund” to make additional payments. Another $11 million in civil penalties will be paid to the state plaintiffs, while another $10 million payout will go to the FTC to administer restitution to customers who unknowingly left tips that were not going to drivers.
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“We have issued payments to impacted drivers and continue to make additional payments as appropriate,” a Walmart spokesperson said in a statement. “We are continuously improving procedures to ensure fairness and transparency for drivers.”
Joined by the states of Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah and Wisconsin, the FTC alleged in its complaint that America’s largest retailer showed drivers in its Spark Driver delivery program inflated base pay and tip amounts compared to what they would end up receiving.
“Walmart has long been aware of the harms caused by its deceptive practices, which
have generated thousands of consumer complaints to Walmart, Spark support contacts, internal Walmart audits, and negative social media posts,” the complaint read. “Rather than address these well-known issues, however, Walmart has persisted in these practices and continues to attract and retain drivers and customers to Spark with false earning claims and misleading representations.”
Drivers who sign up to deliver Walmart products to customers through the Spark Driver app are given an estimate of how much the driver will earn from the delivery, including the base amount Walmart will pay the driver and any tip the customer has selected to pay ahead of time.
In some instances, Walmart showed one offer to the driver, but would instead split or change parts of the order after the driver accepted the offer, causing the driver to receive less than initially advertised.
The plaintiffs also accused Walmart of deceived customers by falsely claiming that 100 percent of customer tips would go to drivers. According to the FTC’s complaint, the company did not always pass on the full tips and sometimes made no tip payments.
“Walmart internally acknowledged that instances of customers leaving tips that neither went to drivers nor were refunded to customers were among the top ‘25 biggest defects affecting Spark,’” read a statement from FTC chairman Andrew Ferguson and Federal Trade Commissioner Mark Meador.
The Spark program utilizes gig-economy workers as drivers that fulfill deliveries for Walmart customers by picking up products from the retailer’s stores, or other retailers that contract with Walmart. The suit indicates Spark drivers have made 355 million deliveries from more than 4,200 Walmart stores across 17,000 unique pickup points since the program first launched in 2018.
The complaint and stipulated final order were filed in the U.S. District Court for the Northern District of California.
As part of its settlement with the FTC, Walmart is required to implement an earnings verification program to ensure drivers are paid the promised earnings and tips, among other orders. Going forward, the company will be unable to modify an offer for base and incentive pay or tips after the initial offer, except under limited circumstances such as when the driver fails to provide the required service or the customer cancels an order.
Additionally, Walmart must submit an annual report to the FTC for the next 10 years to make sure drivers are being paid what they were promised and document the effectiveness of the program.
“Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, in a statement.
Delivery has been a major factor in the success of Walmart’s e-commerce operation in recent years, with three-hour-or-less Express Delivery growing more than 60 percent year over year.
For eight straight quarters, sales at the retailer’s U.S. e-commerce operation has grown at least 20 percent, and the segment has been profitable for all four quarters of 2025.
Last February, DoorDash agreed to pay $16.8 million to 60,000 of its delivery workers in New York to settle claims that the service used tips to offset workers’ base pay.
