As I'm a Starbucks Corporation (NASDAQ:SBUX) shareholder (a very very minor one), I get an annual "bonus" -- a special-edition Starbucks gift card with a little less than $4.00 in value, good for one grande almond latte (or thereabouts). The gift cards are pretty, and seem special, so when I have a little cash in my bank account and get the urge I'll refill it -- then, when I'm totally out of cash and dying for a sticky-sweet cup of milky caffeine, presto! Starbucks.My friend takes it to a whole new level. She and her husband are both self-employed, and they've set a strict budget that ensures they'll live within their monthly invoices. So she buys a Starbucks card every week or so, on Monday when her spending budget for the week begins anew. That way, if she spends all her cash by Thursday? She can still hang out with me and our boys at Starbucks on Friday afternoon.
It's a hedge against brokeness.
A report in the AP indicates that 12% of all sales at Starbucks are through these refillable gift cards -- that's one in eight lattes. There are many theories about why the cards are so popular, but I'd just like to stake my claim on the concept that buying gift cards ensures that you'll still be able to buy coffee and 'Top Pot' chocolate doughnuts when you've spent all your money!
The article indicates that other restaurant retailers, like Wendy's International (NYSE:WEN) and McDonald's Corporation (NYSE:MCD), are beginning to offer refillable gift cards as an answer to customer demand. Somehow I don't think they'll be as popular at fast food joints as with Starbucks, and I'll put forward a crazy theory about that too.
Part of the appeal of the gift card is that you don't feel obligated to tip if you pay with a gift card -- there's no cash change to throw into the little acrylic box, and the gift receipts don't have tip lines (so smart, that way neither Starbucks nor its employees will be required to report and pay taxes on their tips).
McDonald's, Wendy's and other fast food restaurants don't really lend themselves to tipping, so there's no additional incentive to use the gift card instead of cash (if, indeed, you aren't really broke).
Do you use gift cards? And if so, why?
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Reader Comments (Page 1 of 1)
12-12-2006 @ 1:53AM
GreenApronMan said...
Although it would be nice to think that the employees at starbucks were swindling the federal government on the finances gained courtesy of those two cubic tip jars, it is important to note that starbucks does, for its hourly partners that receive tips, report .50 per hour for every partner that works. While the lack of a tip line does make taxes a little more simplified, it is important to know that many customers desire this addition, mainly for credit cards when they don't have the spare change. Starbucks employees continue to hone in on how to become more efficient and provide consistent legendary service to its clientele. It's just important to note that at no point are they trying to take the easy way out on anything.