SEATTLE – At an event outside the Starbucks 1st Avenue and Pike Street store in downtown Seattle on Wednesday, Starbucks customers and consumer advocates spoke out against “dark patterns” in Starbucks’ mobile app payment platform. He announced that he will ask the Washington State Attorney General to do so.
According to the Washington Consumer Protection Federation, the term “dark patterns” refers to app design practices that trick users into making harmful decisions, such as spending more money or making it harder to unsubscribe or cancel. It is commonly used as an industry term.
According to a consumer complaint, Starbucks deceived customers into charging gift cards and points apps with larger amounts of money than usual, making it difficult for consumers to use their balances in full, and then charging the Washington State Consumer Protection Agency. It is said to be in violation of the law.
“Starbucks is rigging its payments platform to encourage consumers to leave unspent money on their cards and apps. “A few dollars left here and there on the payments platform isn’t much. That may sound like a lot, but it adds up to a lot of money. Over the past five years, Starbucks has claimed nearly $900 million in unused gift cards and app money as corporate revenue, boosting corporate profits and cutting into profits. “These are inflated executive bonuses,” said Chris Carter, campaign manager for the Consumer Protection Coalition of Washington, which filed the complaint.
Brittany Ferguson, a customer service representative at Seattle-Tacoma Airport, said she participated in the complaint. “I’ve been reloading my app with $25 for years because I thought it was the minimum amount. Money is tight, so it’s unfair that I have to reload more than I spend. Lose your app balance I tried to split the payment for my account, but it won’t work. I’m ready to delete the Starbucks app, but I won’t get my money back if I delete it. I don’t want to spend money at Starbucks, but I’m forced to do so. “We’re stuck in this weird cycle of having to spend money,” Ferguson argues.
In many states, businesses must seek to return unused gift card and mobile app balances to consumers through the state’s unclaimed property program. The Washington Consumer Protection Coalition says the situation is different in Washington state. “Twenty years ago, some major companies, including Starbucks, supported exempting gift cards from unclaimed property laws,” a coalition press release states.
Earlier this month, the Washington State Budget and Policy Center released a new report analyzing how, under this loophole, companies’ revenue from unclaimed mobile apps and gift cards has exploded over the past two decades. announced.
“A loophole in state law incentivizes businesses to make it difficult for consumers to use or redeem gift cards because if a customer deposits money on a gift card, the gift card holds that money.” Starbucks is taking it to the next level, increasing its revenue from unused gift cards every year and building its entire mobile app on top of digital gift cards, which are not subject to common-sense consumer protections.” said Mischa Vershkur, executive director of the Washington State Budget Policy Center. director.
Just before another legislative session, Washington State Representatives Emily Alvarado and Yasmine Trudeau pre-filed a Washington gift card accountability bill package. The bill aims to eliminate a key incentive for businesses to encourage consumers to load more money onto gift cards than they plan to spend.
The bill would also introduce stronger consumer protections regarding gift cards, giving consumers the opportunity to claim hundreds of millions of dollars unused on gift cards and mobile apps.
The Washington Consumer Protection Federation says payments from Starbucks Rewards members account for 57% of all sales at Starbucks retail stores in the United States. 33 million Americans are active members of the Starbucks Rewards program.
Starbucks used unfair and deceptive practices to manipulate its 33 million rewards program members into loading more money onto its gift cards than they normally would, making it difficult for them to fully spend their balances. The federation claims that by doing so, it is subsidizing business profits. .
Customers spent about $14 billion on gift cards and mobile apps last year, accounting for about 40% of the company’s global annual revenue.