Starbucks double-billed up to one million customers
Posted
Jun 09 2009, 06:10 AM
by
Douglas McIntyre
Rating:
Is it a devilishly clever way for a company with flagging revenue to raise sales? Cheat customers by double-charging them?
According to several media outlets, as many as 1 million Starbucks (SBUX) customers were charged twice what they should have on May 22 and 23. Perhaps it would be better for shareholders if Starbucks hangs on to the cash, but the chain says it plans to pay the money back.
Starbucks, which once boasted that it would have 40,000 stores worldwide, is having trouble making money with the ones it operates now, even though it has closed hundreds of them and laid off thousands of people.
Starbucks has tried to improve traffic to its stores with inexpensive instant coffee and value meals for breakfast. The margins on these products may be so low that double-billing is the only way to move up earnings.
The other option to improve operating margins would be for founder Howard Schultz to work for $1 a year. He is already a multi-millionaire who now has a reputation as a person who is in favor of mass lay-offs. It would be too bad if his company has increased sales by double-billing, even if by mistake.
Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.
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