A 34-year-old office worker who decided to leave Starbucks found herself in a bind over a refund for her prepaid balance. Although 27,000 won remained on the card she had loaded with 50,000 won, she was told she could get a refund only if she used at least 60% of the loaded amount and brought the remaining balance down to 20,000 won or less. "I'm trying to leave, and they're telling me to spend again. That doesn't make sense," she said.
The controversy over Starbucks Korea's May 18 "Tank Day" event is spilling over into the issue of refunds for unused balances on prepaid cards. As boycotts and member withdrawals continue, Starbucks card terms requiring customers to spend a certain amount before they can get back money left in their account have become the subject of a legal dispute.
◇ "They tell me to spend again when I want to leave"... application for a payment order
According to legal sources on the 24th, attorney Yang Hong-seok of Law Firm Igong said on the 22nd that on the 21st he applied to the Seoul Central District Court for a payment order seeking the return of an unused balance on a Starbucks card. The claim amount is 100,000 won. A payment order is a procedure in monetary cases where the court orders payment without questioning the debtor. If the other party objects, the case proceeds to a formal lawsuit.
Yang said on social media (SNS), "I think the quickest and least exhausting way to end this is for Starbucks to immediately refund customers in full for their unused funds." He added, "We won't wait long," and said, "If you can't get a refund, it may be good to file directly for a payment order."
◇ Must use 60% to get a refund... consumers say they are being forced to spend against their will
Current Starbucks card terms require customers to use at least 60% of the total balance after the most recent load to be eligible for a refund of the remaining amount. Starbucks also says that to withdraw membership, the Starbucks card registered to the account must have no remaining balance, or the customer must complete the refund process after using 60% or more. A Starbucks official said, "We are applying refund standards in accordance with the Korea Fair Trade Commission's standard terms and conditions for new-type gift certificates."
Regarding this clause, a Starbucks official said, "We are applying refund standards in accordance with the Korea Fair Trade Commission's standard terms and conditions for new-type gift certificates."
The problem is that the same standard applies even when a consumer says they will no longer use Starbucks. While a usage threshold can be set for refunds during normal use, the question is whether it makes sense to require additional spending to get back the remaining money even when a customer intends to end the transactional relationship by withdrawing membership.
In practice, consumers complain that they must make unwanted purchases to meet the refund conditions. People share tips on burning through their balances by buying items they won't consume in stores or by ordering goods in the in-app online store and then confirming the purchase. One case reported buying six 1,500-won bananas to clear a 9,000-won balance.
Yang believes this setup excessively restricts the rights of consumers who want to withdraw membership. He categorized the cause of action in the payment order application as "return of unjust enrichment," but explained that the practical aim is to challenge the unfairness of the terms.
"In a membership withdrawal situation, requiring 60% usage to get back the remaining balance restricts the freedom to leave," he said. "Refunds premised on withdrawal need to be viewed differently from ordinary refunds for customers who continue to use the service."
◇ The key issue is not the "60% rule," but whether it can be enforced even upon withdrawal
Legally, the focus is likely to converge less on the 60% refund rule itself and more on whether it can be applied without exception even in membership withdrawal situations. The issue is whether refunds for customers who continue to use the service and refunds for customers seeking to sever the transactional relationship can be held to the same standard.
In particular, the fact that the current wave of withdrawals was sparked not by simple change of heart but by controversy over Starbucks' May 18 "Tank Day" event could bolster the consumer side's argument. The question is whether it is justified to demand additional spending to obtain a balance refund when trust has been damaged due to Starbucks' responsibility.
Starbucks also has grounds for rebuttal. Amount-based gift certificates typically allow a refund of the remaining balance only after a certain percentage has been used. The logic is that it prevents abuse by effectively cashing out loaded funds. For this reason, it is difficult to immediately deem the clause requiring refunds only after using 60% or more to be illegal.
However, circumstances may differ for membership withdrawal. Even if withdrawal is formally possible, if consumers must make unwanted purchases to get back unused balances, it can be argued that the right to withdraw is substantively constrained. Starbucks, on the other hand, is expected to stress that this is a general refund standard based on the Korea Fair Trade Commission (FTC)'s model terms and industry practice.
If Starbucks objects to the payment order, the case will proceed to a formal lawsuit. In that event, the court is expected to examine whether the clause is unreasonably disadvantageous to customers under the Act on the Regulation of Terms and Conditions, and whether there is a rational basis for restricting the return of balances. Yang plans to proceed to the merits if Starbucks files an objection. However, he said the case will be closed if Starbucks refunds the balance individually.
Similar consumers may also bring additional challenges. However, they are more likely to take the form of individual suits rather than class actions. This is because, for Starbucks card refund disputes, each consumer differs in load timing, amounts used, remaining balances, and circumstances of the refund request. Ultimately, separate from any issue with the terms themselves, judgments may vary depending on the situation in which each consumer requested a refund.