Starbucks fined after it's caught charging a hidden fee for whole beans

The Boston Globe reports:

After a state consumer agency discovered Starbucks Coffee Co. was charging a hidden fee on bags of coffee beans and slapped it with a fine, the coffee giant is dropping the secret surcharge.

Starbucks was adding about $1.50 to the price of bags of coffee beans weighing less than a pound, never posting the addition to the price.

The Massachusetts Office of Consumer Affairs and Business Regulation discovered the practice in late August and fined five Starbucks locations with $1,575 for overcharge violations two weeks ago.

Last week, Starbucks nixed the $1.50 fee - and not just in Massachusetts. Pressure from the state’s consumer agency spurred the company to eliminate the extra charge nationwide.

Care to explain this, Howard?

Comments

[James Connolly]

Well he DID just give his son a multimillion dollar condo. That money has to come from somewhere...

[Coffee Soldier]

They are lucky that is the biggest fine they got...As long as I can remeber, more then 8 years now, 1/4 lbs and 1/2 lbs are more expensive then what you would think which would be the cost of 1/2 the pound or 1/4 of it...I always thought it was because we had to open the bag scoop it, weigh it, so they passed the cost onto the consumer for more labor intensive product...by this rational shouldn't a short which is half the size of a grande be exactly half the price???

[Petie]

Then shouldn't two talls be the price of a venti too?

[Bayareabux]

Prices were fine, they just weren't posted -- Starbucks decided it was easier to give in than make additional signage like the whole bean menu board. Business sense would say that the smaller portions should cost more, Especially since we end up throwing out the rest of the pound 9 times out of 10. Now these sales will be loss leaders!

[spence]

It's not so secret to the customer when the price shows up on the register or the customer paid for it.

[thinknshare]

Whether or not business sense suggests a higher price on smaller qty. does not legitamize a hidden cost. Good business practice is based off of transparency....and transparency includes total transaction cost.

Just my two bits.

Think-Share-Inspire www.thinknshare.com

[Siberiabux]

I'm not sure I understand why this is an issue, Starbucks never posted incorrect prices, on top of which, a fee was charged? Nor do the menus reflect pricing on short beverages, yet we still charge set portion pricing. Please, explain why one is a finable offense and the other is just business tactic?

[drive]

We never charged a fee at my store. We often sold half pounds or quarter pounds of coffee. Sometimes a customer would want two quarter pounds of different flavors ground and mixed together. That was a total pain. But we never charged extra.

Is there a button on the till for this?

We did not throw out the remainder of the bag. Usually we ground it up and used it to make drip coffee. If someone asked the flavor, we said it was our particular location's special in-house blend.

[Sarah]

Speaking of secret price jumps...did the price of drip coffee change again? Or of breakfast sandwiches? My tall drip and turkey bacon sandwich in the morning use to come to $4.90 or 4.94 depending on what part of Chicago I was in. Today it was rung up at $5.39. What's the deal? It's not an enormous difference, I guess, but there's something mentally different (and adds up) in putting down 5 bucks for breakfast vs. Needing to now have 6. Anyone know what the deal is?

[snagger]

Now let's see some lawyers like the one's SBUX keeps sue to recover the hidden costs that were charged over the last several years.

[Coffee Soldier]

I was just using a 2 shorts be the price of a grande as an example since 8 plus 8 equals 16 or a grande but 12 plus 12 or two talls doesn't equal 20 or a venti so not sure where that rational is coming from...

[stan]

this is dumb. and if you go to costco and buy a 5lb bag it's 30 dollars... buying in bulk costs less thats why costco is in business.

[M]

So is this why we had to stop selling people half pounds immediately?

[Ian]

@M

Short answer: yes.

[morningbecomes]

@M- what?

[Jim]

This is more of an accounting thing. The fee that we didn't know about was probably going somewhere else than the actual price of the coffee. It's not illegal to charge whatever you want for the beans, but if there's a "fee" on the spreadsheet that the customer wasn't told about, that's a problem.

[lattelady]

Walked in this AM only to find that a TALL went up to $1.65 with no advance warning. What is up with that? regulars are annoyed.

[otterinthewater]

@Sarah

At least as of today in the market I'm in, certain prices for drinks have gone up.

Happy Holidays!

[Confused as always]

1.65 from..?

[lattelady]

Tall brew was 1.50 in our market.

[Jessie]

It really does require A LOT more labor to sell a half pound of coffee. If a customer orders one we have to walk around the counter to get it for them (because they never actually just take it off the bean wall and hand it to us), open it, weigh it, grind it, package it, and repackage the other half. It doesn't sound that difficult but on Saturday afternoon when there are only two baristas working and the line is to the door and the register partner has to ignore all other customers to do this, it's a problem. Plus we usually end up throwing the other half pound away anyway. I think the up charge is completely warranted. I noticed the price go down at my store a few weeks ago.

[Baristamom]

This is just stupid! People know buying a smaller quantity of something costs more per ounce or pound. Someone was bored and wanted to cause issues!

[Matthew]

Seriously, you can get the barista to open up the pound bag and sell you half of it? And people do that? I learned something new today.

Can I get half a muffin to go with that?

[Jules Ng]

I'm thinking the fellows that don't like meeting customer requests, may not wish to continue their career in customer service.

[Di]

Mass. fined starbucks for a hidden fee...ulll..it! Get a life and I dare you to eat a hamburger from burgerking!