New complaint claims Starbucks app traps customers in spending cycle

Dedicated Starbucks customers know that the use of the company’s mobile app and digital payment cards to pay for coffee and other goodies comes with restrictions.

You can only add money to the card in $10 increments and must choose a tip from predetermined choices. That means no loading an exact amount for a single purchase or giving an odd tip amount to get your balance down to zero.

And you can’t split a payment between two cards if one doesn’t have enough money on it to cover your purchase, unless you complete the transaction in person.

Critics say those practices are “unfair and deceptive” and called on Washington State Attorney General Bob Ferguson to investigate whether the practices violate the state’s consumer protection laws.

In a 15-page complaint, the Washington Consumer Protection Coalition (WCPC) alleges that platforms for the company’s mobile app and digital payment cards are designed to trick customers into a vicious cycle of spending more money than they want—akin to  “an involuntary subscription.”

Chris Carter, the coalition’s campaign manager said, “A few dollars here and there left on a payment platform may not sound like a lot, but it adds up.”

Over the past five years, he said, the company has claimed nearly $900 million in unspent gift card and app money as corporate revenue.

Leaders of the coalition, whose members include the Washington State Labor Council, the Washington Education Association, and Invest in Washington Now, announced the filing of the complaint at a news conference in Seattle.

Brittany Furgason, a customer service agent for Alaska Airlines at SeaTac Airport, is one of the affected customers seeking action against the Seattle-based coffee merchant.

“I personally feel I have a moral obligation to hold corporations accountable to best practices when it comes to the treatment of consumers,” she said. “Consumers should have the freedom to spend the money they have paid to Starbucks completely in the way they choose.”

Brionna Aho, communications director for the attorney general’s office, confirmed receiving materials from the coalition.

“We will be carefully reviewing the information provided,” Aho emailed us. “Anyone who suspects they are the victim of an unfair or deceptive practice should file a complaint with our office.”

A Starbucks spokesperson said customers appreciate the ease and convenience offered with the app. If one encounters an issue, “our customer care team will work with them to make it right,” said Sam Jefferies of Starbucks media relations.

Starbucks is committed to working with the State of Washington to ensure it remains in compliance with all state laws and regulations, he said.

Harry Brignull, a user experience designer, coined the term “dark patterns” in 2010. He used it to describe actions a company may build into its platforms that trick or manipulate users into making choices they would not otherwise have made and that may cause harm.

As more and more commerce has moved online, the use of manipulative design practices has grown in scale and sophistication, the Federal Trade Commission (FTC) reported last year.

The coalition that brought the complaint claims that Starbucks designed “dark patterns” into its mobile app and digital payment card platforms.

The mobile app requires a $10 minimum to start, and customers are steered into reloading excessive amounts because the pre-select is for $25 when lower amounts are possible.

Because customers cannot reload only what they need to cover a one-time purchase, they are pushed into making future purchases, the complaint states.

“This Catch-22 traps customers in a cycle that resembles an involuntary subscription,” the complaint reads.

Customers who come inside a store can avoid such hurdles. But the complaint argues that this isn’t enough.

“The fact that Starbucks makes certain choices impossible via the app that are still available in-person suggests Starbucks has deliberately designed its Payment Platform to influence customer behavior in a way that is beneficial for Starbucks but harmful for the consumer,” it reads.

Filing of the complaint coincided with the pre-filing of legislation that would prevent Starbucks and other large businesses from continuing to profit from unspent gift cards.

As a result of a 2004 law, businesses can keep the unspent funds and report it as revenue. Bills getting introduced in the Washington State House and Senate would require that gift cards with money left on them for three or more years be sent to the state as unclaimed property. That would provide additional time for cardholders to access their money.

This article previously appeared in Stateline and originally appeared in the Washington State Standard. Read the original article.

Dedicated Starbucks customers know that the use of the company’s mobile app and digital payment cards to pay for coffee and other goodies comes with restrictions.

You can only add money to the card in $10 increments and must choose a tip from predetermined choices. That means no loading an exact amount for a single purchase or giving an odd tip amount to get your balance down to zero.

And you can’t split a payment between two cards if one doesn’t have enough money on it to cover your purchase, unless you complete the transaction in person.

Critics say those practices are “unfair and deceptive” and called on Washington State Attorney General Bob Ferguson to investigate whether the practices violate the state’s consumer protection laws.

In a 15-page complaint, the Washington Consumer Protection Coalition (WCPC) alleges that platforms for the company’s mobile app and digital payment cards are designed to trick customers into a vicious cycle of spending more money than they want—akin to  “an involuntary subscription.”

Chris Carter, the coalition’s campaign manager said, “A few dollars here and there left on a payment platform may not sound like a lot, but it adds up.”

Over the past five years, he said, the company has claimed nearly $900 million in unspent gift card and app money as corporate revenue.

Leaders of the coalition, whose members include the Washington State Labor Council, the Washington Education Association, and Invest in Washington Now, announced the filing of the complaint at a news conference in Seattle.

Brittany Furgason, a customer service agent for Alaska Airlines at SeaTac Airport, is one of the affected customers seeking action against the Seattle-based coffee merchant.

“I personally feel I have a moral obligation to hold corporations accountable to best practices when it comes to the treatment of consumers,” she said. “Consumers should have the freedom to spend the money they have paid to Starbucks completely in the way they choose.”

Brionna Aho, communications director for the attorney general’s office, confirmed receiving materials from the coalition.

“We will be carefully reviewing the information provided,” Aho emailed us. “Anyone who suspects they are the victim of an unfair or deceptive practice should file a complaint with our office.”

A Starbucks spokesperson said customers appreciate the ease and convenience offered with the app. If one encounters an issue, “our customer care team will work with them to make it right,” said Sam Jefferies of Starbucks media relations.

Starbucks is committed to working with the State of Washington to ensure it remains in compliance with all state laws and regulations, he said.

Harry Brignull, a user experience designer, coined the term “dark patterns” in 2010. He used it to describe actions a company may build into its platforms that trick or manipulate users into making choices they would not otherwise have made and that may cause harm.

As more and more commerce has moved online, the use of manipulative design practices has grown in scale and sophistication, the Federal Trade Commission (FTC) reported last year.

The coalition that brought the complaint claims that Starbucks designed “dark patterns” into its mobile app and digital payment card platforms.

The mobile app requires a $10 minimum to start, and customers are steered into reloading excessive amounts because the pre-select is for $25 when lower amounts are possible.

Because customers cannot reload only what they need to cover a one-time purchase, they are pushed into making future purchases, the complaint states.

“This Catch-22 traps customers in a cycle that resembles an involuntary subscription,” the complaint reads.

Customers who come inside a store can avoid such hurdles. But the complaint argues that this isn’t enough.

“The fact that Starbucks makes certain choices impossible via the app that are still available in-person suggests Starbucks has deliberately designed its Payment Platform to influence customer behavior in a way that is beneficial for Starbucks but harmful for the consumer,” it reads.

Filing of the complaint coincided with the pre-filing of legislation that would prevent Starbucks and other large businesses from continuing to profit from unspent gift cards.

As a result of a 2004 law, businesses can keep the unspent funds and report it as revenue. Bills getting introduced in the Washington State House and Senate would require that gift cards with money left on them for three or more years be sent to the state as unclaimed property. That would provide additional time for cardholders to access their money.

This article previously appeared in Stateline and originally appeared in the Washington State Standard. Read the original article.