According to a new complaint from a consumer rights group, the Starbucks app has trapped customers in a cycle where they continuously add more money to their accounts because they can't use up their remaining balance. Customers earn double loyalty points if they pay for orders through the app.
But the consumer protection alliance says some features of the prepaid card mean customers are trapped in a vicious cycle, forced to spend more at Starbucks. Customers can only top up their Starbucks card on the app in increments of $5, with a minimum of $10. This means the account is always overspent, and customers often can't top up enough to pay for a single purchase.
Many users have banded together to accuse Starbucks of profiting up to $900 million.
The complaint alleges Starbucks tricked customers into loading more money than they intended to spend, leaving them with unusable odd amounts. The coalition accuses Starbucks of unfair and fraudulent business practices, violating the Consumer Protection Act . The complaint alleges the company profited from its unfair in-app payment system by up to $900 million over five years.
In the formal complaint, the group stated that customers loaded approximately $15 billion into Starbucks cards last year, and the company relied on this money as a source of non-interest-bearing operating capital. Therefore, the company had a strong incentive to maximize the amount of money flowing into the payment platform and sought to maximize it by using certain manipulative digital design features on its mobile app.
A Starbucks spokesperson told Fortune that the company is committed to working to ensure compliance with all laws and regulations. Starbucks said that when paying in-store, customers have the option to split their payment to use up the value of their Starbucks card and then pay the remainder with cash or credit card.
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