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Giving away free coffee: theft or good for business?

i always have to bring my wallet to the local starbucksWhile I'm occasionally offered refills at no charge at my local independent coffee shop, I'm never offered free drinks at either that establishment or my local Starbucks Corporation (NADSAQ:SBUX) outlet. (And I'm nice, really I am!) Yet many customers, if a recent thread at Starbucks Gossip is any indication, are. One (must be extremely nice) customer writes in to say that she's comped as much as 2/3 of her drinks.
The post started quite a discussion about free beverages, with one angry district manager writing in to claim that this was theft, and if he were their boss, he'd fire the whole lot of 'em. Some other equally angry and righteous commenters agreed, but the general consensus was that occasional free beverages were good for business -- "Surprise and Delight" 'em, the concept goes, and they'll keep coming back and spending their money in your store. And putting lots of extra bills in your tip jar!

Sure, if a customer is getting most of her drinks free, and putting the $2 in the tip jar instead of the till, that equation is pretty straightforward: sorry guys, that's just a tiny bit of bad ethics there. But a once-a-week freebie for great customers or even (as one barista mentioned) confused out-of-towners? I'm thinking that it will serve to increase business and customer goodwill.

Starbucks giving away iced coffee ... oops

try your coffee icedRemember those emails sent around 1999? "Please forward this email and Bill Gates will give you $1,000," it said. Something about an experiment Microsoft was conducting.

Starbucks unwittingly conducted an experiment in the forwarding behavior of its employees in the Southeast U.S., offering a coupon for one free iced coffee (between noon and 9 p.m.) via email. The email said to "try your coffee iced" and encouraged employees to forward the printable coupon to families and friends.

Some of the family and friends, evidently, have eBay seller accounts and printed out multiple coupons to sell. As the Oregonian noted, you could buy a pack of nine Starbucks free iced beverage coupons -- redeemable for anything from a regular iced coffee to a Frappuccino. While the AP is saying that Starbucks has rescinded the offer, according to the Oregonian, many stores were still honoring the coupons -- good through September 30, according to the fine print.

Starbucks can hardly afford to lose sales this month given its poor results last month, but what's worse: the small impact of those still forwarding the emails (and the few dozen being sold on eBay), or the negative PR of pulling a freely-given coupon?

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Last updated: February 11, 2012: 02:47 PM

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