The Washington Consumer Protection Coalition, a consumer action group, is accusing Starbucks of exploiting its customers through its gift card and app payments.
Fortune Magazine reported the group is accusing the coffee giant of forcing its customers into a spending cycle where they will be unable to fully spend the remaining balance of their prepaid amounts.
In a 15-page complaint, the group alleged 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.
According to the group, the design stops customers from reaching a $0 balance, meaning Starbucks pockets whatever customers leave on their balance.
The group is calling on the Washington state Attorney General Bob Ferguson to investigate whether the company violated consumer protection laws.
“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 group, 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.”
The coffee giant has disputed the claims, adding 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.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.
“We are seeing an enthusiastic response to the Starbucks x Stanley Quencher,” a company representative told USA Today.
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