Starbucks accused of manipulating app payments for $900 million profit

You don't like buying 5% more points than you need for any purchase?

It's only really a problem when you can't buy the exact amount of points you need to make a purchase (which granted is most of the time). There's legitimate reasons for using a "points" middle-man, though - for example, in a game where you can earn premium currency while playing, but also buy it; if you were making purchases directly, rather than buying the points you need, you wouldn't be able to buy something using both earned and purchased currency; it'd be all or nothing.

This is definitely a very small minority, though, and 99 times out of 100, I agree with you, it's a scam.

Their black coffee isn't great, but their espresso is good which is what makes it into the sugary drinks. I think the main draw is that it's pretty consistently decent, while with other chains like Dunkin or Wawa you're never quite sure what you're going to get but it's probably not going to be that good. I'll also add that the coffee they sell at grocery stores isn't bad (although it's far from my favorite). I think it's much worse at Starbucks itself because it inevitably ends up burnt pretty shortly after it's brewed.

As far as price, it costs $2 because that's the price that Starbucks determined maximizes profit. From what I've seen at other coffee shops though including Mom and Pop ones, that price point is pretty typical.

Their coffee tastes the way it does because of how they roast it, it's a purposeful style thing (that tastes terrible and is horribly overpriced imo).

Their roasts are also darker than they say. Everything they have is dark roast, with their 'blond' coming in closer to a medium.

People go nuts over the sugar, caffeine and perceived status, it has nothing to do with the taste of the coffee. As a fellow black coffee drinker, my recommendation is to avoid Starbucks unless you happen to be near a union store where the coffee is guaranteed to taste more like freedom, but still like ashes soaked in oil.

In case you want more details: The way coffee roasting works is you move beans around in a real hot container, and you try to keep them to a specific point on a temperature graph at each moment as they roast. A different roaster would roast them a bit slower, but Starbucks just blasts those beans with everything they have, then they don't stop until the beans are burnt. This gives them their "signature taste". This is largely because of Howard Shultz, the guy who drove the company to be a cafe, and until recently the CEO. That's his preferred coffee taste and that's what he demands the company makes.

Also, why does a small cup of black coffee cost $2+

CEO needs another yacht, my dude.

Dark Roasted coffee is the only way Starbucks can be Starbucks.

Lighter-roasted coffee emphasizes origin flavors and i agree with you --generally tastes better and is more interesting.

But you can't sell coffee like that in tens of thousands of coffee shops and have it remotely consistent.

Coffee growing from the same plot but on one side of a hill will taste different from the other side due to getting different quantities of sunlight. Complex origin flavors will always be the domain of small specialty coffee shops.

Starbucks has McDonalds-like consistency serving millions of customers a day and that's only because they emphasize the flavors they can get consistently--roast flavors.

TL;DR The bigger the chain, the darker you have to roast. That's just how coffee works.

From what I understand, part of Starbucks thing is catering to people who like burnt and bitter. Kind of like the emo crowd.

I drink espresso (like just shoot a double shot back) and their stuff leaves a terrible aftertaste.

Edit: If you like black coffee, go for a medium roast premium or specialty grade coffee from Costa Rica that goes through a honey process. Very smooth, low acid and a hint of natural sweetness from the coffee fruit.

Yeah, they over roast their coffee. It’s deliberate. I assume it’s for consistency and because it’s a low effort way to cut through all that milk and sugar in expensive lattes. Americans have also been conditioned to associate dark, bitter coffee with “strong”.

The irony is dark roast has less caffeine than lighter roast and it’s usually done to mask defects in the bean. Whether to roast light, medium or dark typically isn’t an arbitrary decision or based on any preference. There’s a whole grading process where the ideal roast is determined based on the quality of the beans.

The highest quality beans will often be roasted medium and you start going darker as you get into the lower quality stuff. Basically, you’re cooking off bad flavors that may be the result of sour beans, mold, insect damage, chemicals or worse. There are all kinds of farming practices you don’t want to know about where they get away with it by roasting dark and/or blending with a little bit of a higher quality coffee.

The thing with Starbucks is they actually start with good beans so they don’t have to do this. They also have a wide variety of suppliers and bean types. They could easily put together a great flavor profile that would work for lattes as well as black coffee. But things do change a little bit from one harvest to the next. Starbucks is all about consistency. You can order the same drink at any location in the world and it tastes exactly the same every time.

A small black coffee is $2 because people will pay that much. The cost is less than 25 cents for the coffee. The cup and lid might cost more than what you’re drinking if it’s a commercial grade bean. Coffee is a high margin business.

The source is Android Authority and it appears to be referencing dark patterns in mobile apps

It’s about the intersection of their app, their rewards systems and the dark patterns in the whole system that lead to them accruing a lot of money that they don’t really deserve. That’s pretty much a tech story.

So it's not a lawsuit (yet), it's a complaint to the state attorney general of Washington accusing Starbucks of unfriendly consumer practices related to their gift cards, in part because they can recognize unspent gift cards as revenue, and also because it's instant cashflow for them even if the accounting revenue lags behind. The need to come up with a calculation for how much deferred revenue to recognize can be abused by execs to nudge the revenue higher (and with no additional costs associated with it, profit as well) and thereby improve stock price and trigger bonuses and whatnot.

The actual complaint reads as a bit of pearl-clutching ("involuntary subscription" because customers don't want to leave a balance OR talk to a real human at their local Starbucks!) , but on a the "death by a thousand cuts" model, yeah, I suppose Starbucks is being kinda dickish. The app doesn't give you as many rewards if you pay with CC, buries the other payment options a couple of layers deep in a menu, doesn't let you reload gift cards in increments equal to a purchase, doesn't let you split payment methods, and sets a high default reload so (on iOS at least) it isn't immediately visible that you even could scroll up to reload in smaller amounts.

It's sort of garden variety asshole app design meant to soft-lock customers in, but it's not really fraud in any meaningful way if someone is motivated. You add money, you get bitter overpriced coffee that your partner really likes for some reason. I prefer CHEAP, ACIDIC coffee because I did the pourover too fast on mediocre store-bought grounds that are too fine, LOL. Still, maybe worth a public scolding or some fines to get them to modify it so people can save a few bucks without diving into the finer nuances of their coffee app.

No, it's not. The complaint is linked in the article, here is the first sentence:

For several years, Starbucks has subsidized its operations with significant customer cash inflows generated at least in part by using unfair and deceptive practices to manipulate its 33-million rewards program members into paying in advance for their purchase.

It goes on to describe dark patterns manipulating consumers into spending more than they would otherwise. You are describing one of the motivations for Starbucks to do so.

I've never had a Starbucks gift card or used the app, but in the article they say that in store you can do a split payment using up either gift card or app balance, and pay the remainder cash. Is that something you've tried?

Starbucks disputed the allegations and told Fortune that customers can pay for their orders with whatever balance is left on their app or gift card and pay the remaining amount in cash at the store, thus reaching a zero balance.

So, this is not true? What's the actual truth to this functionality?

I regularly get them from family, its annoying for this reason. But its better just use the remainders as a few bucks off a regular purchase (that id make anyway).

French vanilla coffees?

Like in France, the country that invented the espresso?

😭

Jk, you do your stuff ofc 😊

As a gift