Starbucks Korea's prepaid balance hits $276M, sparking regulatory concerns

The combined balance of prepaid funds loaded onto Starbucks Korea cards stood at 420 billion won (US$276 million) as of the end of 2025, data showed Sunday, raising concerns over a regulatory blind spot and prompting calls for tighter supervision by financial authorities.

According to Starbucks Korea's audit report, the amount marked an 8.2 percent increase from 395 billion won a year earlier.

Despite holding a massive amount of customer funds loaded onto prepaid cards, Starbucks Korea is not subject to regulations governing prepaid electronic payment instruments.

Under South Korean law, prepaid instruments refer to payment methods used to purchase goods or services from third parties, which excludes Starbucks Korea's prepaid cards because the company acts as both the issuer and place of use.

Experts say refunds are effectively limited because customers must use at least 60 percent of the remaining balance before requesting a refund.

Starbucks Korea, meanwhile, has faced calls from activists and consumers to offer an unconditional refund policy following its recent controversial marketing event that critics said mocked the May 18 pro-democracy movement.

The coffee chain launched the tumbler promotion on May 18 with phrases including "Tank Day" and "Tak on the desk!" but scrapped it within hours.

Critics said "Tank Day" evoked the military crackdown on the 1980 Gwangju pro-democracy uprising, while "Tak on the desk!" recalled an infamous police explanation in the 1987 torture death of student activist Park Jong-cheol, in which police claimed he died after a desk was struck with a "tak" sound.

On May 18, 1980, citizens rose up against a military junta led by then Army Gen. Chun Doo-hwan in the southwestern city of Gwangju. Chun sent troops to brutally suppress civilians before ultimately seizing power through a military coup.

The government, meanwhile, reviewed whether to revoke a commendation awarded to Starbucks Korea over the recent promotional event, although it eventually concluded the controversy had little direct connection to the company's activities cited for the award.

The Ministry of SMEs and Startups recently reviewed whether to revoke the Prime Minister's Commendation granted to Starbucks Korea last year, according to the sources.

In November, Starbucks Korea received the award for its efforts to develop beverages utilizing domestic agricultural products while supporting small merchants and local farms.

"As the recent issue has become a social controversy, we reviewed the honor granted to Starbucks Korea," a ministry official said.

"As we concluded that Starbucks Korea's contributions and the current issue are not directly related, we decided to exclude the case from the list of potential revocations," the official added.

Others, however, say the government can still revoke the award considering the social backlash of the controversy.

According to government award guidelines issued earlier this year by the Ministry of the Interior and Safety, the government may revoke commendations at any time if recipients trigger social controversy.