Starbucks Ends Undisclosed Fee on Bean Purchase Under One Pound

You might have been charged an additional $1.50 for buying smaller bags of coffee beans at Starbucks and left the store without even knowing it, until recently. Starbucks Corp. stopped adding the surcharge at over 11,000 stores nationwide this month after a Massachusetts consumer-protection agency fined the company over the practice.

The Massachusetts Office of Consumer Affairs and Business Regulation became aware of the fee in August. The U.S. coffee giant was adding $1.50 to the price of bags coffee beans weighing less than a pound without notifying the customer as legally required. The fee was not posted in the stores, nor was it identified on the receipt.

A consumer buying a half pound of coffee that was marked as $11.95 a pound would ordinarily think a half pound would cost 50 percent of the pound price or $5.80. Instead, a half-pound of coffee that was labeled as $11.95 a pound, for example, would end up costing $7.30, instead of $5.80.

The Massachusetts agencies estimate approximately 75,000 consumers were charged the extra fee.

While Starbucks, and any retailer, is allowed to charge any additional fees it wants on a product, those additional fees have to be clearly and conspicuously disclosed to the consumer before the purchase, said Barbara Anthony, the Undersecretary of the Office of Consumer Affairs and Business Regulation. We are pleased that Starbucks has decided to drop this fee, ending any confusion for consumers buying coffee in their stores.

Massachusetts has a state consumer protection act known as Chapter 93A, which prohibits unfair or deceptive acts or practices in trade or commerce. It is important that sellers make consumers aware of any facts that might cause them not to enter into a transaction, including any fees that would be added to the total price without the consumer's knowledge before the transaction.

Last week, Starbucks agreed to end the fee in Massachusetts and other stores across the country, which came into effect on Nov. 7, in all of its U.S. stores.

Starbucks spokesperson Alan Hilowitz, said the surcharge was posted to cover the additional labor and packaging needed to accommodate customers' unique requests.

We are pleased to be able to now offer our customers alternative sizes of whole bean coffee in all of our U.S. stores, free of any service charge, he added.

Starbucks Corp. reported this month a nearly 29 percent jump in profit in the fiscal fourth quarter and earnings of 47 cents per diluted share, beating Wall Street estimates by 11 cents.