The arbitration clause in the terms and conditions for using a Starbucks Card had previously stated that, “Unless you and we agree otherwise, any arbitration will take place in Seattle, Washington and will be conducted in the English language.”
Note that this condition requires both parties to agree to a non-Seattle location for the arbitration process. So whether you lived in Portland, Oregon or Portland, Maine, Starbucks could have said “tough teabags” and made you travel hundreds, possibly thousands, of miles just to have your matter heard by an arbitrator who has likely handled numerous Starbucks claims.
Given that some cities have blocks with more than one Starbucks on them, it only seems fair that customers should be able to resolve their legal disputes more locally.
Additionally, Starbucks has added the ability to opt out of its arbitration requirement. Existing users will only have 30 days from when the new rules kick in on
April 16 April 12, and the opt-out must be done in writing to:
Starbucks Card Team
2401 Utah Avenue S.
Seattle, WA 98134.
(Update, 4/15/16: We initially reported that the new agreement went into effect on April 16, but the date was April 12, the day the new rewards program began.)
“Any opt-out received after the Opt Out Deadline (allowing three (3) additional days for mailing) will not be valid and you must pursue your claim in arbitration or small claims court,” read the new terms.
Most surprising are the arbitration-related notes in the new terms which use language that is normally reserved for critics of the process, and not multinational, multibillion-dollar companies that want to use arbitration against their customers.
In the notes at the top of the new terms, Starbucks explicitly states that failing to opt out of the arbitration clause will “Eliminate your right to a trial by jury,” and “Substantially affect your rights, including preventing you from bringing, joining or participating in class or consolidated proceedings.”
That sort of transparency runs counter to the typical corporate explanation for arbitration, which is that it “benefits” the consumer by providing an expedited process.
Except that may be the only benefit for consumers. Arbitration also limits the damages, limits the customer’s ability to join their complaint together with other similarly wronged customers, does not require the arbitrator to explain their decision, and results in no legal precedent being set.
We’ve asked Starbucks to explain why it changed the arbitration terms in its agreement, but have yet to hear back. If the company does reply, we will update this story.