Starbucks' hidden coffee surcharge halted

SEATTLE -- After being investigated and fined in Massachusetts, Starbucks says it has stopped charging a $1.50 fee for customers buying less than a pound of coffee in its stores.

Investigations in Massachusetts began after a family member of the commonwealth's undersecretary of consumer affairs and business regulation was charged the undisclosed fee. Undersecretary Barbara Anthony said she and her staff then checked other Boston-area Starbucks and asked friends and family in other states to check.

They found the fee was charged consistently and not disclosed either on signs or by Starbucks staff. The extra $1.50 just appeared on customers' receipts -- an undisclosed fee that Massachusetts considers an overcharge.

After Massachusetts Division of Standards personnel started buying half-pounds of coffee undercover and fining Starbucks employees for charging the hidden fee -- fines that totaled $1,575 -- the coffee chain decided to drop the fee.

Starbucks spokesman Alan Hilowitz said the fee was charged for the additional labor and packaging it takes to divide its larger-sized bags.