Thursday, June 11, 2009

Starbucks Overcharged People for Espresso

Just saw this little news tidbit:

A Double Charge for a Double Espresso

Because of a computer glitch, Starbucks accidentally charged about 1 million customers double for their coffee purchases on May 22 and part of May 23.

This revealed two things: Starbucks needs to maintain its computer systems better, and way too many people are using debit and credit cards to make tiny purchases.

The glitch occurred in the United States and Canada. Starbucks is working to reimburse all overcharged customers.

The problem was made much worse by the fact that receipts showed that the proper amount had been charged. Consumers saw the error, if they saw it at all, only when they looked at their statements after the transactions were processed. Starbucks is crediting the accounts.

But, really, people: I know Starbucks can be pricey, but it's not that pricey. You don't carry enough cash with you to pay for a cup of coffee?

Well, I'm sure David Bach ("The Latte Factor ™") will have a field day with this! But why the hating on credit cards?? Coffee is one of the few things I actually do pay cash for, but if I wasn't always hurrying in the morning, I'd probably use a credit card too!

More details on the Starbucks snafu available at MSNBC.


Anonymous said...

You're bashing people for not carrying cash? With all the rewards points and perks given by credit cards, a lot of people use a credit card for every purchase and pay the bill off in full. This is a win win both sides, 1.) I get points and get to delay my cash flow and keep my money longer. 2.) the credit card company receives the 2% fee they charge vendors for acepting credit cards.

Still don't undeerstand peoples logic to bash people who do not carry cash. I live in NY and can rarely find a situation were I would need cash, and if I did on short notice I could easily locate a bank to make a withdrawl.

One draw back some might argue is that errors like this can occur, but my response would be to keep all receipts and balance them against your online/mail statements.

conclusion, carry cash isn't for all and debit/credit cards certyainly have many advantages to paying in cash.

Clean ClutterFree Simple said...

I rarely carry cash, and usually use a Starbucks card (reloaded when needed) for my coffee--why? I get free refills and wi-fi.

I use a debit card for everything else. It helps me track spending.

Odd that that article's author would bash using a card to pay. Would using cash have allowed customers to catch the overcharge? Maybe. But imagine a distracted Starbucks customer who hands over a $20 for that double espresso. They are handed change and just move on to the hand-off area. Does anyone count their change anymore?

kat said...

Yep! I agree with Anonymous. 2% cash back. 'Nuff said. :)

Anonymous said...

Processing debit card transactions (cheapest I heard 4%) and credit card transactions (expensive up to 7%) is a cost the merchandiser has to account for.

If the issuers of the cards decide they aren't getting enough of a return on their risk, those fees will increase. If the ratio of profit is significantly less on a purchase of a latte, then you can bet those transaction fees will go up, or points awarded will be reduced.

There is no free ride.

Land refinancing said...

I think he's just hating on the fact that people e a tendency to over charge on their credit cards. It's not the using the credit cards, it's the carrying debt and making this a indentured servant society.

Kim said...

I try to charge everything on credit or debit so it pops up on and I can then put it in its proper category. I use $100-$200 in cash a month.

Also, I'm playing credit card arbitrage (new 0% on purchases til October card with 2% cash back and a high-interest checking account at 4% = earning 6% on my credit card purchases!)

Anonymous said...

Cash? Seriously? What's your problem with credit? Cash is so 20th century. I pay off my cards every month and love the convenience. I earn 5% on groceries, gas, and drugstore purchases, and 1% on everything else. I balance my statements every month (under 5 minutes).

As for the risk -- someone has gotten a hold of my card numbers exactly twice in my life, and each time the fraudulent transactions were taken off and a new card issued -- all with less than ten minutes on the phone! Cash seems positively prehistoric in comparison.

Personal Finance Princess said...

I carry cash most of the time, but I don't use it when I have the option to pay with a card. As other commenters have said, I like the cash back and the spending tracking. I save my cash for the places that are cash only.

Kate said...

I was just going to say, "hey this gives a whole new meaning to the latte factor" but looks like you beat me to the punch! Just another example of how God is in the details. Starbucks execs should have taken a look at the book, The Power of Small before this fiasco! In this economy, this especially can't be good for their PR.

1001 Petals said...

1. I used to prefer the convenience of debit but with all the fraud going on lately cash seems much safer. Twice this year I've had my account frozen cause employees at reputable stores were copying PIN and account numbers.

2. Starbucks undercharged me today for an iced latte. I was only charged for an iced coffee. I realized it too late though and there was a big line-up and I was in a rush, so I didn't go back to say anything. . ..that is my excuse :)

Anonymous said...

I use my AmEx for everything (I get points) and pay it off each month. I was actually one of the people that Starbucks double charged. It was the Friday before Memorial Day and I got a latte while I was waiting for my car maintenance to finish up. I noticed it the following week when I looked at my AmEx statement...I disputed it online with Amex and on this month's bill, I have a double I think I got the latte I did order for free :)

Jeremy Burlingame said...

I have enough airline miles to go to Cancun and 15,000 away from round trip to Italy; cash would never have given me that.