Update: Starbucks Coffee Co.'s Alan Hilowitz, director of corporate communications, responded to Massachusetts action:

"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. Starbucks regularly reviews our pricing and makes adjustments from time to time. We are pleased to be able to now offer our customers alternative sizes of whole bean coffee in all of our U.S. stores, free of any service charge."

 The Massachusetts Office of Consumer Affairs & Business Regulation announced today that Starbucks is dropping a $1.50 undisclosed fee that it charged to consumers who purchased bagged coffee that was less than one-pound. The fee was charged nationwide.

The Massachusetts regulator says it became aware of the fee in August, and did a survey of Starbucks stores around the state. Consumers buying coffee in amounts smaller than one-pound were charged a $1.50 fee, although the retailer didn’t post the fee for consumers to see and it didn’t appear on the receipt, the regulator said.

A half-pound of coffee that sells for $12 per pound would cost $7.50 instead of $6.

The state’s Division of Standards bought half-pound bags of coffee at five locations in Massachusetts, and each time got slapped with the fee without notice. The state fined the five stores a total of $1,575.

The regulator estimates that 75,000 consumers paid the fee. That’s $112,500. And that's just Massachusetts.

I asked Jason Lefferts of the Massachusetts Office of Consumer Affairs if Starbucks is reimbursing  consumers the money. He says his office is still discussing that with Starbucks, but acknowledged it would be hard to identify who actually paid it.

I left a message at Starbucks media hotline for a response. Waiting to hear back, and will post their reaction here.