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A US consumer protection group has claimed that the coffee giant is rigging its payment system to increase profits.
Starbucks is facing questions about its payment system, after the Washington Consumer Protection Coalition submitted a complaint to the state’s attorney general regarding what it deems unfair practices.
The consumer group says that Starbucks has subsidised its operations with significant customer cash inflows generated "at least in part by using unfair and deceptive practices to manipulate its 33-million rewards program members" into paying in advance for their purchases.
The Seattle-headquartered company has been accused of doing this via its “Payment Platform”, which comprises the Starbucks’ mobile app and also a digital Starbucks payment card, a reloadable gift card.
"Together, these dark patterns have the effect of steering Starbucks customers to hand over to the company more money than they might have otherwise chosen to," the consumer group says.
These dark patterns include allowing customers to reload cards on the mobile app only in specific amounts, with a $10 minimum, setting a default reload amount of $25 on the app and displaying $15 as the lowest reload amount, even though the actual minimum reload amount is $10.
Further, the group says that Starbucks is limiting tipping through the app and disallowing customers from splitting payments across multiple payment methods when they order through the app and pay using their in-app card.
The first two practices tend to force customers to load inflated amounts onto their cards, and the latter two practices prevent customers from using small card balances and zeroing out their accounts, the complaint says.
Customers loaded roughly $15bn onto Starbucks Cards last year, according to the complaint, which also points out that Starbucks handled more payments than Apple Pay or Google Pay at times in recent years.
The campaign group says that the dark patterns that Starbucks has built into its Payment Platform are “unfair and deceptive trade practices” that are in violation of the Washington Consumer Protection Act.
So-called dark patterns have become a key theme for regulators in the US.
For example, the Federal Trade Commission released a report in 2022 on the matter, whereby the regulator claimed that companies are using sophisticated design practices that can trick or manipulate consumers into buying products or services or giving up their privacy.
In January 2023, the FTC finalised a consent order against Credit Karma, requiring the company to pay $3m to consumers that it claimed had been misled through dark patterns into believing they were pre-approved for credit cards.
