Starbucks to pay $225,000 for shorting consumers in gift card redemptions

Coffee chain to tell California customers they can cash in cards worth less than $10

The district attorneys' offices of Sonoma, Monterey and Shasta counties have settled a civil complaint that claimed Starbucks failed to redeem gift cards worth less than $10 for cash.

Sonoma County District Attorney Stephan Passalacqua announced the settlement Wednesday.

"This action ensures that when it comes to gift card cash refunds, consumers will get what they deserve," Passalacqua said.

A California law enacted Jan. 1, 2008, requires businesses to refund gift card balances of less than $10 for cash.

Starbucks agreed to pay $225,000 in civil penalties, costs, restitution and to other provisions that ensure future compliance, Passalacqua said.

The civil judgment was filed in Shasta County Superior Court on Aug. 13.

It requires Starbucks to outfit all its point of sale devices with a specific button to allow employees to process in-store redemption of gift card balances, train employees in the procedure and post signs notifying customers they may redeem their gift card balances of less than $10 for cash, Passalacqua said.

In July, there were approximately 1,800 Starbucks stores in California and 35 in Sonoma County alone, Passalacqua said.

Starbucks cooperated with prosecutors during the investigation, Passalacqua said.

The giant coffee chain made some efforts to comply with the January 2008 law and once alerted to the investigation, addressed the problem before the filing of the complaint and judgment, Passalacqua said.


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Like this comment
Posted by Cathy
a resident of Ruby Hill
on Aug 21, 2009 at 8:16 am

I LOVE STARBUCKS! They are the best. :-) Gotta go get my mocha now.

Like this comment
Posted by gee
a resident of Del Prado
on Aug 21, 2009 at 1:33 pm

Peets all the way !!

Like this comment
Posted by Mike
a resident of Highland Oaks
on Aug 27, 2009 at 3:20 pm

While I prefer the coffee I make at home, I do very much like Starbucks, Peets, Tully's and the rest.

This story, though, points out that there are some obstacles on the road to achieving corporate greatness.

Sorry, but further commenting on this topic has been closed.

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