Starbucks to drop fee on smaller bags of coffee

Starbucks Corp has agreed to drop a $1.50 fee that was undisclosed to consumers purchasing bagged coffee in sizes less than one pound, after Massachusetts investigated and fined the coffee chain.

Massachusetts Division of Standards said in a statement that it estimates that about 75,000 consumers were charged the extra fee. The division also imposed a fine of $1,575 on Starbucks.

Starbucks spokesman Jim Olson told Reuters that customers are now offered alternative sizes of whole bean coffee in all of U.S. stores, free of any service charge.

"Starbucks charged a $1.50 service fee for customers who request to purchase only a half-pound of whole bean coffee not pre-packaged in that quantity. That charge covered the additional labor and packaging needed to accommodate those customers' unique request," Olson said.