January 5th 2024.
The Washington Consumer Protection Coalition, a consumer action group, is accusing Starbucks of exploiting their customers through its gift card and app payments. According to a 15-page complaint, the group alleged that Starbucks’ mobile app and digital payment cards are basically an “involuntary subscription,” because customers can only reload money in $5 increments with a minimum purchase of $10. This design stops customers from reaching a $0 balance, meaning Starbucks pockets whatever customers leave on their balance.
Chris Carter, Campaign Manager for the group, stated “Starbucks rigs its payment platform so consumers are encouraged to leave unspent money on their cards and apps. A few dollars here and there left on a payment platform may not sound like a lot but it adds up. Over the last five years, Starbucks has claimed nearly $900 million in unspent gift card and app money as corporate revenue, boosting corporate profits and inflating executive bonuses.”
In response, Starbucks has disputed the claims. A company representative stated that customers can pay for a purchase with the remaining money on the app and pay the remaining balance in cash at the store. The Starbucks app and drive-thru orders are the most popular way people purchase their coffee and assorted drinks.
The Washington Consumer Protection Coalition is calling on the Washington state Attorney General Bob Ferguson to investigate whether the company violated consumer protection laws. Meanwhile, Starbucks is enjoying a nice start to the year as its pink Stanley Cups are selling out across the country, with some people camping out in front of target locations to get their hands on the cups.
Regardless of the success of the new pink cup, the Washington Consumer Protection Coalition insists on holding Starbucks accountable for their practices and actions. It remains to be seen how the Attorney General's office will handle the case and what the outcome will be. In the meantime, the group is urging customers to be more aware of the extra money they're leaving behind when they purchase items from Starbucks.
In related news, more than 3,500 union Starbucks employees are striking over the company's ban on Pride decor. As the fight for consumer protection and LGBTQ+ rights continues, consumers and Starbucks employees alike are standing up for what they believe in.
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