Starbucks Korea faces lawsuit over gift card refunds amid boycott

Starbucks Korea is facing a legal challenge demanding the full refund of pre-charged funds on its gift cards, amidst a growing consumer boycott. The lawsuit challenges the company's policy requiring customers to use at least 60% of their card balance before being eligible for a refund.

The legal action, filed at the Seoul Central District Court, seeks the return of the entire unused amount on Starbucks cards, regardless of usage. The plaintiff's lawyer argues that customers should be able to reclaim their full pre-paid balance. This move comes after Starbucks Korea faced intense criticism and calls for boycotts for its recent promotional event that allegedly used insensitive references to the May 18 Gwangju Democratization Movement and the late activist Park Jong-cheol.

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We request the return of the full unused amount on Starbucks gift cards.

Consumer groups are backing the demand for full refunds, highlighting the controversy surrounding the promotional event as a catalyst. However, the path to full reimbursement is complicated by the Fair Trade Commission's standard terms for gift certificates. These regulations typically state that refunds are only possible after 60% (or 80% for amounts under 10,000 won) of the stored value has been used.

According to Starbucks Korea's 2023 audit report, the total amount of pre-paid funds held by the company from customer gift card top-ups stood at approximately 427.5 billion won (about $310 million USD). The lawsuit represents a significant consumer pushback against corporate practices, amplified by the recent public relations crisis. The court's decision on the payment order application will be a key development, with the defendant having the option to object, which would then escalate the case to a full civil lawsuit.

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The amount of Starbucks pre-paid funds (advance payments) charged by Starbucks customers stood at 427.5 billion won as of the end of last year.