Starbucks has found itself in hot water this month following claims made by the Washington Consumer Protection Coalition. According to the Seattle-based organization, which prides itself on valuing "the public good over private greed," Starbucks has taken advantage of customers using its gift card and app payments.
In a statement obtained by Yahoo! Finance, a representative for the Washington Consumer Protection Coalition offered an explanation on how exactly Starbucks allegedly rigged its gift card and app payments to rake in almost $900 million in additional revenue.
According to the rep, given the way the gift card and app payments are setup it makes it nearly impossible for customers to use all of the funds available. Additionally, you can only add $5 increments and must spend a minimum of $10.
“Starbucks rigs its payment platform so consumers are encouraged to leave unspent money on their cards and apps,” said Chris Carter, campaign manager for the organization, in a statement. “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.”
News of the accusations against Starbucks has even made its way to TikTok, where one creator stated that the payment system is "carefully designed so you never hit zero."
Following the release of the consumer action group's 15-page complaint, a spokesperson for Starbucks told Fortune that they're "committed to working with the State of Washington to ensure it remains in compliance with all state laws and regulations."
Starbucks also clarified that customers are in fact able to use the remainder of their gift card or app balance by using the remaining amount and then paying the balance in cash at the coffee shop.
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January 10, 2024 at 12:06AM
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Starbucks Manipulated Its Payment System To Increase Profits By Nearly $900M, According To Consumer Group - Delish
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