Starbucks in South Korea has prepaid 427.56 billion won and may face a wave of refunds

Starbucks in South Korea's prepayment amounted to 427.56 billion won, and there may be a wave of refunds due to public resistance. The picture shows people in Gwangju smashing Starbucks tumblers. (Reuters)

[Real-time News/Comprehensive Report] South Korea's Starbucks launched "Tank Day" on the anniversary of the Gwangju Democracy Movement on May 18, triggering criticism and boycotts from all walks of life. Lawyers have now taken the lead in filing a "payment order" with the court, requesting the refund of members' prepaid fees. Starbucks South Korea's prepayments as of the end of last year were 427.56 billion won (approximately NT$8.88 billion). It would be unimaginable to trigger a wave of refunds like a "cash run".

According to Korean media reports, during the holiday noon time, a Starbucks branch in Gwangju that was always full of customers was empty, and there were no customers inside or outside the store. Gwangju citizens said that although Jung Yong-jin, chairman of Shinsegae Group, the parent company of Starbucks in South Korea, had apologized, the apology was to blame the grassroots staff. Even if the idea was thought of by employees, it would have to be approved by management before it can be launched.

As the boycott expands, people have begun to pay attention to South Korea's Starbucks' high prepayments, which are the fees consumers deposit on APPs or prepaid cards. As of the end of last year, they totaled 427.56 billion won. In addition, Starbucks has made 40.8 billion won (approximately NT$847 million) in profits from prepayments through deposit interest or trust methods since 2020.

It is understood that Starbucks prepayments in South Korea follow the regulations of the Fair Trade Commission (Fair Trade Commission). At least 60% of the stored value must be used before refunds can be made. If the prepayment is less than 10,000 won (approximately NT$208), 80% must be spent.

When lawyer Yang Hong-seok (양홍석, transliteration) applied to Starbucks for a refund of prepaid fees, he was rejected because it did not meet the above regulations. In response, he filed a "payment order" with the Seoul Central District Court. If Starbucks South Korea receives a notice from the court, it can file an objection within 2 weeks and enter the general litigation process.

The South Korean Consumer Group Association believes that Starbucks should unconditionally refund all prepayments to people who indicate that they will not consume in the future. After all, when the operator obviously made a mistake and consumers launched a boycott, it should not be subject to the restriction of spending 60% first.

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