Food/Groceries

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Is Starbucks Pocketing Millions in Small Gift Card Balances Illegally?

Starbucks gift cardA new class action lawsuit claims that Starbucks is pocketing millions of dollars from small balances on used gift cards rather than making refunds of those amounts readily available to customers.

Under the law of some states, consumers can request cash back when a gift card’s balance falls below a certain amount. In this case, since the consumer lives in Massachusetts, that law governs requiring a refund at the customer’s option when the gift card balance falls to five dollars or less.

*MOUSE PRINT:

The complaint in this case alleges:

5. Defendant’s Gift Cards state that they “Cannot be redeemed for cash unless required by law.”

6. However, Defendant does not reveal that despite this affirmation, Defendant’s policy is that the Gift Cards are completely non-refundable and in fact have no mechanism in Massachusetts to refund the value of the Gift Cards even in situations where state law requires it.

The filing says the consumer’s lawyer was not able to get a refund of the $4.94 remaining on his client’s gift card by using the online form on the Starbucks website because that is limited to just residents of California and Oregon. A Boston Starbucks location was also called inquiring about a refund but it was denied there too. What the lawyer apparently didn’t do, however, is call the customer service number listed on the website for those in other states seeking refund assistance.

For its part, the company gave Axios the following statement:

“Starbucks is well aware of state gift card redemption requirements and has proper policies and procedures in place to honor valid gift card cash redemption requests.”

This case is similar to one we reported on in May when Dunkin’ was allegedly found not refunding small balances on its gift cards.

We’ll let you know what happens as these cases move forward.

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Carnation Breakfast: Where’s the Promised Protein?

Earlier this month, a class action lawsuit was filed against Carnation about the allegedly misleading label on some of its Breakfast products.

The product, which comes in packets, boasts on the front of the package that it has 13 grams of protein, 21 vitamins and minerals, 3 times the vitamin D of milk, and three times the calcium of Greek yogurt.

Carnation breakfast

On the far right of the package, in tiny type, is a key disclosure:

*MOUSE PRINT:

Carnation - add milk

Most shoppers are not likely to see that, and it certainly isn’t remotely close to the protein claim. On the back, the ingredients statement has powdered nonfat milk as the primary ingredient. That might lead one to believe all you have to do is add water.

However, when checking the nutrition facts label, it becomes clear that the protein content of each packet is only 5 grams, and only magically becomes 13 grams as represented on the front of the package when consumed “as prepared” when adding milk.

*MOUSE PRINT:

Carnation nutrition label

So, what do you think? If you picked up this product and saw the 13 grams of protein claim on the front of the package, would you understand that that amount is only the result of adding milk to the product? There are no instructions on how much to add.

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Melt: Is It Really Butter?

Recently, Melt, a vegetable oil spread, seems to have changed its packaging perhaps in an effort to boost sales. Best we can tell, this was the old package:

Melt old

The new packaging is dramatically different, and no longer emphasizes the product name, Melt, but rather shouts one other thing — butter. It even seems to call the product “butter” or “butter sticks.”

Melt new

Only in much smaller type beneath the big butter representation are the words “Made from Plants.”

Our concern is that a hurried or distracted shopper could easily pick up this product, seeing the huge word “butter” on it, and think that’s what they were buying.

“Butter” is not a generic term that can simply be applied to any kind of spread. There is a 99-year-old federal law — a standard of identity — for butter.

“butter” shall be understood to mean the food product usually known as butter, and which is made exclusively from milk or cream, or both, with or without common salt, and with or without additional coloring matter, and containing not less than 80 per centum by weight of milk fat…

So butter has to be made only from milk or cream and contain at least 80% milk fat.

*MOUSE PRINT:

Melt is made from a combination of coconut, palm fruit, sunflower and flaxseed oils, and is only 62% fat.

The FDA has jurisdiction over butter labeling, and over the misbranding of food products if they have a label with a “false or misleading representation with respect to another food.” Apparently, however, the agency has not been particularly motivated to take action against companies that arguably try to mislead customers into thinking their spread is real butter.

The outgoing executive director of the The Butter Institute told Consumer World that “it is fairly obvious that marketers of these products are looking to hitchhike on the highly regarded taste and performance of real butter and its popularity with consumers. …the improper labeling of food products claiming to be butter, but not meeting the standard could be in violation of not only federal labeling regulations, but also an act of Congress.” That organization says it is not aware of any regulatory action taken by the FDA as a result of its complaints.

The state of California tried to stop another company from using the term “butter” on its package for a vegan spread, but did not succeed in its lawsuit.

We asked the company that makes Melt some very pointed questions about why they changed their packaging, why it made the word “butter” the most prominent word on the display panel, and whether it was an attempt to potentially mislead shoppers.

The company has not responded despite two inquiries.