Yikes—Starbucks Is In the Hot Seat For a $900 Million Scandal

Nowadays in the fast-food world, apps are everything.

Companies are going to great lengths to have you download their reward apps, making it nearly impossible to claim any deal or promotion without them. And frankly, we haven’t have much reason to be wary of them. The apps help you easily order your customized lunch or coffee treat, let you skip the line, and promise rewards on the other side. It’s a win-win-win—right?

Well, thanks to some digging by a consumer watchdog group, now we have a better idea as to why these major fast food players pushing for app-native commerce—starting with the second largest fast food company in America: Starbucks. 

How Starbucks Is Allegedly Collecting Money From Customers

According to a recent complaint by the Washington Consumer Protection Coalition, Starbucks has been wrongfully collecting money from customers through its “rewards” app—over $900 million in corporate revenue over the past 5 years. How? Through tactics known as “dark patterns,” or deceptive designs on digital platforms. 

Here’s how it works. When you place an order through the app, you’re encouraged to pay for it using your Starbucks Card (to earn two times the rewards). The default reload amount to add to your Starbucks “wallet” is $25, and the options go up in $5 increments. The lowest reload amount displayed is $15 when, in actuality, the lowest possible input is $10 (you have to scroll to find that option).

“Consumers noted spending more money at Starbucks because of high reload minimums than they would have if they had been able to load the exact amount of money required for the item they actually desired to purchase,” the issued complaint reads.

Additionally, when your in-app Starbucks card gets down to its final dollars and cents, you can’t use it toward an in-app purchase and supplement the rest with another form of payment. To zero out the credit, you have to make your purchase in person at the store register. Want to put that extra change towards a tip for your barista? That's not easy either. The in-app tipping options start at $0.50, and go up in whole-dollar increments from there.

“Because Starbucks also makes it difficult or impossible for customers to reclaim funds from their Cards except by making Starbucks purchases, these practices trap consumers into perpetually reloading funds on their Starbucks Cards in an effort to use all remaining funds, which essentially amounts to an involuntary Starbucks subscription,” the statement continues.

As a result of these "dark patterns," customers are uploading money to the app unnecessarily, and most of the time, absentmindedly. All of a sudden, Starbucks is the bank, and you’re the newest customer. 

Sure, these might just be dollars and pennies to each of us, but on a grander scale, the multinational coffee company is racking in millions of dollars from its loyal (yet uninformed) customers. Consumer advocates in Washington are now urging the Washington Attorney General to put a stop to this “vicious cycle” of unethical consumer influence.

A Starbucks spokesperson responded to the claim via email, saying, "We strive to make every customer’s visit to Starbucks effortless, delightful and personalized. No matter how customers choose to pay at Starbucks, the goal is to deliver a seamless payment experience. Starbucks is committed to working with all regulatory bodies to ensure it remains in compliance with all laws and regulations."

So, how do you avoid these “dark patterns”? Unfortunately, we won’t firmly advise you to “stay off the apps,” but we will urge you to be more aware of default settings, reload options, and any limitations that might be placed on your in-app money. Now you know—even if your dollars don’t go towards a Starbucks purchase, they're still going into Starbucks’ pocket.