As Starbucks Korea stirred controversy by running an inappropriate promotion called "Tank Day" on the 18th, the anniversary of the May 18 Democratization Movement, it has emerged that the issue was not a simple staff error but an organizational failure in which the internal review system effectively did not function.
The promotion went through a four-step reporting process up to the CEO for final approval, but no one pointed out that using the term "tank" on May 18 was inappropriate. Some approvers reportedly did not even open the attachment containing the marketing mockups and approved it out of habit.
Shinsegae Group held a press briefing at the Josun Palace Hotel in Gangnam-gu, Seoul, on the 26th and announced the findings of its fact-finding probe into the controversy over Starbucks Korea's May 18 promotion. The announcement was delivered by Jeon Sang-jin, head of management at Shinsegae Group (vice president).
Jeon said, "Shinsegae Group conducted an internal investigation for about a week starting on the 19th, immediately after the incident, and so far has found no clear evidence proving an intent to disparage the May 18 Democratization Movement." He added, "There were legal constraints in the process of establishing the full facts, such as some employees refusing to submit their phones citing privacy protection," and said, "We will actively cooperate with the police investigation going forward."
According to Shinsegae Group, the promotion was proposed by the Starbucks Korea commerce team. The structure called for the planner to draft, the Head of Team to review, the responsible Deputy Minister to sign off, and the CEO to give final approval. In practice, this promotion was finalized after passing through a four-step reporting line including the Head of Team, head of the strategy support division, and the CEO.
However, no one questioned the inappropriateness of the May 18 anniversary and the term "Tank Day" during the process. Jeon said, "There was not a single objection raised during the planning and approval stages."
During the investigation it was also confirmed that some approvers approved without opening the email attachment containing the marketing design mockups. This means the approvals were given out of habit without sufficient review.
Shinsegae Group said it has so far found no clear evidence proving intent regarding this promotion. Starting on the 19th, the group conducted about a week of phone and laptop forensic reviews and cross-interviews targeting the entire Starbucks Korea commerce team and the approval line including the strategy planning division and the CEO. Other devices and hard disk drives used by the person in charge for work were also retrieved and examined.
However, three commerce team employees, including the staffer who proposed the "Tank Day" NAMING., refused to submit their phones, citing invasion of privacy. As a result, the company could not properly determine what conversations took place among those employees regarding the promotion or what discussions occurred during the work process. Because internal messenger chat logs are stored on the company server for only one week, the company could not confirm messages exchanged during the initial planning stage.
It also emerged that the employees involved actively denied intent during the internal probe. Jeon said, "The employees who planned the promotion stated during the investigation that 'we focused only on matching the rhythm with existing marketing copy and did not think of May 18,' and that 'we used artificial intelligence (AI) to generate the copy and only recognized the problem after the controversy arose.'"
It was was found that the controversial copy "A bang on the desk!" was also inserted at the commerce team stage. According to the incident investigation log that Shinsegae Group distributed separately after the briefing, the commerce team decided on Apr. 3 to bundle the "Tank, Dante, Nasu" tumblers for a promotion. Then on the 15th of the same month, it set "Dante Day" for May 15, "Tank Day" for May 18, and "Nasu Day" for May 20.
The commerce team put the copy "A bang on the desk!" for the Tank event, "Fits in one hand!" for the Dante event, and "Right into the bag!" for the Nasu event. In the group's investigation, the planner said the selling point of the Tank tumbler was a "desk mate," and the phrase was used to emphasize that the large-capacity tumbler is a product used on a desk.
However, after this copy was inserted, it was not separately reported to the responsible executives or management. The copy was then displayed as is on the Starbucks Korea app board on the 18th.
Shinsegae Group said it is difficult to conclude premeditation or intent based solely on the employees' statements, and stated it will actively cooperate with the police investigation to verify additional facts regarding the three commerce team employees who refused to submit their phones. Jeon said, "If the police investigation confirms an intent to disparage the May 18 Democratization Movement, we will immediately dismiss the relevant executives and employees and pursue civil and criminal liability."
Shinsegae Group has removed five employees involved in the promotion from their duties. Former Starbucks Korea CEO Son Jeong-hyeon and the responsible executive were dismissed. The group said it will take stern action against additional responsible parties depending on the outcome of further investigations.
Shinsegae Group also explained findings regarding some suspicions raised online. On the Tank tumbler name, the group said the product was made by an overseas manufacturer and that the name was inspired by an actual "water tank," according to the manufacturer. Regarding the suspicion that the 503-milliliter capacity evokes former President Park Geun-hye's inmate number "503," it explained the figure is the conversion of 17 ounces into milliliters.
As for the mini Tank tumbler release date being set for Apr. 16, the date of the Sewol ferry disaster, the group said Starbucks Korea initially proposed Apr. 20, but the event vendor notified them it was fixed for Apr. 16.
It also denied the suspicion that the 21% discount on the Tank duo set symbolizes May 21, the day of the martial law troops' mass shooting during the May 18 Democratization Movement. It said the price of the mini Tank tumbler in the set was adjusted from 25,000 won to 12,500 won, lowering the overall set price from 60,000 won to 47,500 won, and in the process the discount rate calculated to 21%.
Jeon said, "The public has shown great love for Starbucks Korea over the past 27 years since the first store in 1999, but we failed to repay that love and left a deep wound." He added, "We will use this as an opportunity to reflect on the social value and responsibility of corporations," and said, "We will rebuild trust from the ground up and reestablish ourselves as a company loved by the public."