Starbucks Settles Breakfast Sandwich Price-Switch Class Action

A California judge granted preliminary approval of a settlement that would end a price-switch class action lawsuit against Starbucks Corp., alleging the company overcharges customers for certain breakfast sandwiches.

Los Angeles County Superior Court Judge Lisa Hart Cole gave her initial approval to the settlement on August 24.

The settlement will require Starbucks to pay out refunds to almost 180,000 customers of its company-owned stores in California.

Plaintiff Sarah Martin presented the settlement to the court after reaching an agreement with Starbucks over allegations that the company charged more than the advertised price for two of its breakfast sandwiches.

Under the terms of the settlement, Starbucks will pay a refund to each customer who purchased either a reduced fat turkey bacon breakfast sandwich or a sausage and cheddar breakfast sandwich from a company-owned Starbucks store in California between April and August 2015.

Each such purchase will merit a 25 cent refund.

Martin initiated this Starbucks class action lawsuit in May 2015.

She claimed she was charged $3.75 for a reduced fat turkey bacon sandwich that was advertised at $3.45. Martin also alleged she was charged $3.45 for a sausage and cheddar sandwich that was marked as $3.25.

The plaintiff said that she and other Starbucks customers had relied to their detriment on the lower advertised prices. She further alleged that Starbucks’ policy of asking customers “whether they would like a copy of their receipt,” helps conceal the alleged price difference.

The price-switch violated California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law, according to Martin’s Starbucks class action lawsuit. Martin also raised common law claims for fraud and unjust enrichment.

The alleged 25-cent overcharges added up to a significant sum, Martin claimed, when multiplied by the number of sales among the many Starbucks stores in California.

She named seven specific Starbucks locations within Los Angeles county in her Starbucks class action lawsuit. An investigation by her attorney allegedly found similar pricing anomalies at many other Starbucks locations in California.

In her motion for approval of the settlement, Martin says Starbucks’ total revenues from the pricing at issue add up to about $325,000. The settlement is structured to refund that entire amount to customers affected by the alleged price difference.

The settlement provides that customers who purchased their sandwiches using their Starbucks Rewards accounts will receive their refund automatically. Those who paid via other means and who can provide proof of their purchase during the Class period will receive a 25 cent Starbucks gift card.

In addition to refunding the alleged overcharges, Starbucks will also pay over $40,000 to cover the administrative costs of the settlement. The settlement allocates $91,309 in attorneys’ fees. As the lead plaintiff, Martin herself will receive an incentive award of $5,000.

Instructions on how to file a claim for the Starbucks breakfast sandwich class action settlement were not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also “Follow” this case by using your free Top Class Actions account to receive notifications when this article is updated.

Martin’s attorneys are George S. Azadian and Ani Azadian of Azadian Law Group PC.

The Starbucks Breakfast Sandwich Price Switch Class Action Lawsuit is Sarah Martin, et al. v. Starbucks Corp., et al., Case No. BC582335, in the Superior Court of the State of California for the County of Los Angeles.

UPDATE: The Starbucks breakfast sandwich class action settlement is now open! Click here to file a claim!