By Jessica Yun
Bubble tea chain Chatime is facing refund demands from some customers who purchased a specialty reusable cup that lights up, after the company ordered all stores to stop selling the item immediately.
The bubble tea chain on Wednesday issued a letter to all of its 168 outlets to pull the sale of its 700ml reusable cup, which has a battery-powered light embedded at its base, after finding the company had failed to provide a battery warning on the box.
Chatime has ordered its stores to pull the sale of light-up cups due to non-compliant packaging.Credit: Simon Schluter
“We have just been advised by the Consumer Product Safety Unit that our current Light-Up Cup packaging is not compliant and does not display a battery warning message,” stated the letter seen by this masthead.
“As a result of this, we have been advised to remove all units from display and are not allowed to sell any further units until they complete their review and advise actions to resolve the matter.”
Store operators have been instructed to move the cups from view of customers and into store rooms with a clear label signalling they cannot be sold. Chatime has removed the link to purchase the cup from its ordering system to avoid transactions being accidentally processed.
Chatime has ordered all stores pull its Light-Up Reusable Cup from shelves.
The Light-Up Cup has been sold by Chatime for $26.95 since late 2022. Until recently, the item was available on Chatime’s website for $21.95, but the link has been removed. The item recall comes after a period of rising concerns about fires caused from batteries, particularly those with lithium-ion cells.
A Chatime store owner, who spoke under condition of anonymity, said that some customers had come into store to request a refund and also accused Chatime of misleading customers by suggesting the base could be detached and the battery could be removed and replaced. Customers have raised the same issue on Chatime’s social media posts about the item.
The bubble tea chain declined to comment on whether it was offering customers refunds or on other questions put by this masthead.
“We are working with the regulator and will be guided by their direction on further actions,” said Chatime chief executive Carlos Antonius.
A spokesperson for the consumer regulator said businesses all along the supply chain for button batteries or products powered by them, including manufacturers, importers, distributors and retailers, had to comply with safety and information standards which could be found on the Product Safety Australia website.
“These standards include design requirements and safety warnings and information to be provided on the product and its packaging,” said an Australian Competition and Consumer Commission spokesperson.
“Businesses are responsible for addressing safety issues with products they sell to consumers, such as through honouring obligations under the consumer guarantee provisions, or conducting a voluntary recall, where applicable.”
This is not Chatime’s first issue with selling branded cups. The bubble tea chain was forced to stop selling reusable cups after KeepCup filed a lawsuit against it for using its trademarked name on packaging. The matter was settled for an undisclosed sum.
Over the coming fortnight, Chatime’s consumer product safety unit will determine whether the Light-Up Cup can continue to be sold — “which may include a sticker being placed onto the packaging to make them compliant” — or whether it has to do a complete recall of stock.
That outcome would result in Chatime stores being “credited” for the return of the cups.
A 2019 investigation by this masthead revealed Chatime was covering up rampant underpayment of its workers, many of whom were international students. As far back as 2009, Chatime had underpaid workers by more than $10 million across its franchise network of 111 stores at the time. Antonius said all affected individuals had since been back-paid.
Chatime was founded in 2005 in Taiwan and is listed on the Taipei Exchange with more than 2500 stores around the world. The Australian business is co-leading a global review of the bubble tea chain’s brand.
Know more about this? Email jyun@smh.com.au
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.