In the midst of ongoing boycotts, declining profits, and customer grievances, Starbucks confronts a new challenge: allegations of unfair practices targeting its rewards members. The Washington Consumer Protection Coalition, a consumer rights group, recently lodged a complaint, asserting that Starbucks engaged in "unfair and deceptive practices" related to its mobile app.
Filed on December 19, 2023, the complaint raises concerns about the use of what the coalition terms "dark patterns" to manipulate Starbucks reward members. Details of the complaint can be found below.
At the core of the complaint is the assertion that the Starbucks mobile app employs tactics to compel customers to add more money to their balance than originally intended. The coalition argues that the app utilizes misleading design features that "trick or manipulate" users. A significant issue highlighted is the limitation on reloading Starbucks Cards within specific amounts, with a minimum reload of $10 (despite the default reload amount being $25, and the minimum displayed as $15).
This limitation hinders customers with small balances from efficiently using their remaining funds without additional spending. Moreover, customers are unable to use the remaining balance on their Starbucks card and cover the rest with another payment method. Instead, they are obligated to reload to meet the predetermined minimum amount, perpetuating a cycle of unintended higher spending.
For example, if a customer with only $2 left intends to purchase a $5 drink, they must reload their balance to a minimum of $12. This results in Starbucks accumulating $895M in "breakerage" (unspent money) over the past five years, as per the complaint.
The coalition contends that these practices create an involuntary subscription-like situation for Starbucks customers, trapping them into perpetually reloading funds on their Starbucks Cards, with limited options for reclaiming funds.
As the case unfolds, it remains to be seen how Starbucks will address the allegations and whether any changes will be implemented to address the concerns raised by the Washington Consumer Protection Coalition.
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