Starbucks Korea offers full prepaid card refunds amid brewing consumer boycott

Starbucks Korea, operated by local conglomerate Shinsegae Group's subsidiary SCK Company, will offer unconditional refunds of Starbucks prepaid card balances for about two weeks from Monday to June 14.

Previously, cardholders were eligible for a refund only after spending at least 60 percent of their most recent top-up. Under the temporary measure, however, they can receive refunds of up to 2 million won ($1,320) per account regardless of how much of the balance has been used.

Refunds can be requested through the Starbucks mobile application or at offline stores.

Customers who apply through the app will receive the refunded balance in a designated bank account or through another selected method within seven business days. Unregistered physical cards can be refunded for cash at Starbucks stores.

Starbucks will also temporarily suspend sales of physical prepaid cards during the refund period to prevent so-called card-kkang in Korean, a practice in which prepaid cards purchased at discounted prices are converted into cash for profit. The exchange of e-card vouchers for physical cards at stores will also be suspended unless customers intend to use the card immediately after issuance.

Industry sources estimate that the total value of prepaid funds loaded onto Starbucks cards stands at around 400 billion won.

“We have decided to ease the refund criteria in an effort to minimize customer inconvenience, with a deep sense of responsibility and reflection,” Starbucks Korea said.

The move comes amid a consumer boycott that has continued since a promotional campaign for Starbucks Korea's Tank tumbler products on May 18.

The company drew criticism after referring to the event as Tank Day and using the phrase “Tak! on the desk!” which sparked allegations that it mocked the May 18 Gwangju Democratic Uprising and the torture death of democracy activist Park Jong-cheol.

Shinsegae Group also issued an apology and dismissed Sohn Jeong-hyun, CEO of SCK Company on the day the controversy erupted. Starbucks Korea is an affiliate of Shinsegae Group.

Shinsegae Group Chairman Chung Yong-jin later publicly apologized, but criticism from consumers and the boycott campaign continued.

Despite the effort, the ongoing boycott has begun to affect sales.

Starbucks' estimated weekly card payment volume totaled 23.69 billion won between May 18 and May 24, according to data from Mobile Index, a market analytics service operated by artificial intelligence data analysis company IGAWorks. Card payments during that period were down about 26.3 percent from 32.16 billion won recorded the previous week, from May 11 to May 17.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY NOH YU-RIM [kim.jiye@joongang.co.kr]