Petitions Protest Starbucks' Forced Arbitration Clause on Prepaid Cards

A Starbucks prepaid card doesn't seem likely to be the source of great controversy. But, as it turns out, Starbucks has adopted the forced-arbitration tactic that gets consumer advocates' blood pumping faster than a triple grande latte.

Very simply, by using a Starbucks card, consumers give up their right to join a class action suit against the company and also agree to submit any dispute they may have -- now or in the future -- to binding arbitration.

In effect, citizens of a free country voluntarily -- though often unconsciously -- give up their right to have their claims heard in court.

Public Citizen got wind of this and brewed up a batch of petitions that were eventually signed by more than 15,000 consumers, calling on Starbucks to stop depriving its citizens of their legal rights.

“Forced arbitration and class bans eviscerate consumers’ rights,” said Christine Hines, consumer and civil justice counsel with Public Citizen. “Starbucks’ decision to use them is inconsistent with the company’s claim to be a leader in corporate social responsibility. Now, the people have spoken and they want their rights back.”

The petitions were delivered to Starbucks headquarters last week. What happens next is anyone's guess.

“Starbucks’ lead paralegal, to whom we delivered the petition, warned us that this would be a difficult fight to win and that we’d have to really make our voices heard to get above the cacophony of noises and complaints they receive,” said Deborah Lapidus, a Public Citizen activist who delivered the petition. “However, he assured us that having 15,000 signatures meets the bar for the petitions to make it to the general counsel’s desk and he said that the CEO would end up hearing about it too. Overall, Starbucks’ staff was polite, listened and took our concerns seriously.”