Corporate logo of Starbucks (Starbucks)
The South Korean coffee industry has accumulated approximately 270 billion won ($216 million) worth of unspent stored value on prepaid cards and online coupons, said People’s Power Party lawmaker Yun Chang-hyun on Monday, citing a report from the Fair Trade Commission.
About 92 percent of the unredeemed balance -- 250 billion won out of the 270 billion won -- came from Starbucks Korea, according to the report.
Unspent stored value refers to the balance that is charged on gift cards and vouchers issued by the coffeehouses, but is not redeemed or refunded.
The figure for Starbucks Korea is based on its earnings at the end of 2021, as it did not submit data for first quarter of this year. Industry insiders speculate that Starbucks' actual numbers would have increased to approximately 300 billion won.
“When you purchase a product which costs less than the gifted coupon, the transaction is either not made, or the remaining balance is not refunded,” said Rep. Yoon.
“Leading companies should come up with policies to refund or save the remaining balance to improve customer inconvenience,” he added.
Meanwhile, Starbucks Corp. said in its 2022 first-quarter fiscal report that it has accumulated over $2 billion in “stored value card liability and current portion of deferred revenue” across the world.
“While the customer will eventually withdraw the value of their deposits in the form of drinks, the customer has given Starbucks an interest-free loan,” said accounting professor at McCombs School of Business Patrick Badolato in a recent blog post.
The megasized coffee firm “operates like a bank,” he added.
By Lee Seung-ku (firstname.lastname@example.org