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FTC unlikely to punish Starbucks for reward item shortage

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Starbucks' summer ready bag and summer chair / Korea Times file
Starbucks' summer ready bag and summer chair / Korea Times file

By Kim Jae-heun

Starbucks Korea is unlikely to be sanctioned by the Korea Fair Trade Commission (KFTC) for allegedly committing a "fraudulent act" against its customers.

At a meeting of the National Assembly State Affairs Committee two weeks ago, ruling Democratic Party of Korea Rep. Min Hyung-bae said the American coffeehouse chain violated the Fair Trade Act with its "summer ready bag" promotional event.

Starbucks Korea offered customers who purchased 17 drinks, including seasonal beverages, one of five options ― two types of summer ready bags and three types of summer chairs.

The reward items gained unexpected popularity among customers with the summer ready bags in particular causing a craze here that led people to wait in front of Starbucks coffee shops every morning to check the inventory.

According to the lawmaker, Starbucks Korea "lured" customers with the reward items but failed to prepare a sufficient inventory. As a result, a lot of people purchasing beverages never received the promotional camping gear.

Rep. Min suggested Article 23 of the Fair Trade Act as the legal grounds for his argument, which bans acts of rejecting transactions unfairly or discriminating the counterparts. It also prevents a firm from unfairly exploiting its position when trading with another.

The lawmaker urged KFTC chief Cho Sung-wook to launch an investigation. Cho responded: "It is hard to tell if it was an illegal act just from listening to Rep. Min's allegation, but I will look into the matter."

As a consolation to customers, Starbucks Korea gave out free coffee to those who waited long hours before the stores opened but didn't receive reward items. But this was not enough to stop some from complaining, leading Rep. Min to bring up the issue.

"If Starbucks Korea deceived customers with false advertising or committed any acts against the Fair Trade Act, it will be subject to punishment," a KFTC official said. "However, it gave out the reward items until it ran out of stock; and it notified customers prior to the event that the promotion would end early if it used up its inventory. In this case, it is hard give it a penalty."

"Though, we will to look into whether Starbucks Korea deliberately prepared a small amount of reward items in the first place or intentionally managed the inventory to keep customers keep coming back for the reward items," the KFTC official said.

Meanwhile, the summer ready bags shortage has led people to trade the promotional gift on secondhand online trading platforms for as much as 160,000 won ($134.62) online.

The promotional event ended July 17.


Kim Jae-heun jhkim@koreatimes.co.kr


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