Apparently the reward for success in America is that
everyone lines up to sue you for the most minor slights. Case in point: “a Starbucks customer in Chicago has filed a
new class-action suit saying that the coffee company underfills its cold drinks
by adding too much ice to them.”
Starbucks’ defense is that “ice is an essential component of any 'iced'
beverage." The class-action suit
asks for five million dollars.
This news comes less than a month after Starbucks was sued
for under-filling its lattes by 25%.
Their probable defense is that foam is part of the experience, but that
isn’t really the point. Suing big companies
seems to be the new national pastime.
Remember, this is the same Starbucks that recently ranked 5th in Fortune’s most admired companies with high marks for social responsibility and quality of
products and services. In the same year
Starbucks was described by another website as the “epitome of a company guided
by its values, with the character, conviction and reputation equity.” With over 22,000 stores, their biggest
problem lately is that they are too popular to be considered upscale or hip, as
they were in the early days.
It is also the same Starbucks that served as an example for
every financial advisor in the country.
The standard answer to how someone can save money was to not spend $5 a
day on fancy coffee. I don’t hear this
much any more. Maybe the financial
advisors have decided it was a losing battle.
People are not going to give up their fancy coffee even if it means
paying off college loans sooner or having enough money set aside for a
comfortable retirement.
Personally, I have never been in a Starbucks store. When they went public in 1992, in a gross
overestimation of the intelligence and consumer savvy of the American people, I
assumed the business model was not sustainable.
How many people are going to spend that much on fancy coffee (plus the
inconvenience of getting there and waiting in line), when most coffee drinkers already
were set up to make their own coffee at home for far less? I guess the answer was a lot! I could have paid the equivalent of $0.27 per
share, (adjusted for our six subsequent stock splits) and sold it today for
nearly $60.
Well, that’s my loss.
I guessed wrong. Little did I
realize that the answer to the financial problems was to spend money on
high-priced coffee all these years and then, when they got to be big and
successful, sue them for adding too much ice. It’s the new American way – have your cake
(or coffee) and eat it, too!
Enough with the sarcasm…
The real problem here is economic understanding and perspective. People assume that awards or settlements from
these lawsuits come from some magical insurance fund. It really comes from you and me as customers
of these companies, and, where insurance is involved, from you and me as
customers of insurance companies whose rates must go up every time their risks
increase, regardless of our individual behavior.
This person was not harmed by getting less beverage and more
ice. This was likely not a one-time
encounter where they felt they got cheated out of maybe a dollar. It was likely a pattern where they got
cheated out of 10 or 20 dollars. But if
money was the issue, they shouldn’t have been patronizing Starbucks in the
first place. Fancy coffee is a luxury! It’s a choice; we can live without it and did
so for hundreds of years. Anyone who is
not satisfied with a product can easily take their business elsewhere. A lawsuit for too much ice seems vindictive
and much more trouble than it’s worth.
The problem is that lawyers know and most consumers are
learning that big, successful companies will grudgingly part with a few million
dollars to settle even a ridiculous grievance to avoid the expense and disruption of a trial
with the very real risk of a sympathetic jury taking the opportunity to
redistribute a little of the wealth. The
system is broken, and Americans both as consumers and jurors continue to exacerbate
the problem.
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