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Starbucks drops $1.50 hidden fee for bagged coffee

The move comes after Massachusetts fines the coffee company for adding on a surcharge for purchases of less than a pound in its stores.

November 15, 2011|By Melissa Allison

Reporting from Seattle — After being investigated and fined in Massachusetts, Starbucks Corp. said it has stopped charging a $1.50 fee for customers' buying less than a pound of coffee in its stores.

The coffee chain said the surcharge affected less than 1% of its coffee bean sales at cafes. It said the charge did not affect Starbucks' growing sales at grocery stores, where bags are not divided for customers.

Investigations in Massachusetts began after a family member of the commonwealth's undersecretary of consumer affairs and business regulation was charged the undisclosed fee. Undersecretary Barbara Anthony said she and her staff then checked other Boston-area Starbucks, and asked friends and family in other states to check.

They found the fee was charged consistently and not disclosed either on signs or by Starbucks staff. The extra $1.50 just appeared on customers' receipts — an undisclosed fee that Massachusetts considers an overcharge.

"Any company, including Starbucks, is entitled to charge any price they want, and if [they] want to add fees, that's their prerogative," Anthony said.

Starbucks quickly acknowledged the fee; and after Massachusetts Division of Standards personnel started buying half-pounds of coffee undercover and fining Starbucks employees in stores for charging the hidden fee — fines that totaled $1,575 — the coffee chain decided to drop the fee everywhere beginning last week.

"We'd been talking with Starbucks, and we wanted things to move a little faster," Anthony said. "Once the facts are there, there doesn't seem to be much point in dragging it out, because consumers are being injured while you are chatting."

Starbucks spokesman Alan Hilowitz said the fee was charged for the additional labor and packaging it takes to divide its larger bags. He also pointed out that smaller sizes of many products have higher per-unit costs.

Allison writes for the Seattle Times/McClatchy.

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