Starbucks borrows billions from its own customers… with gift cards (2024)

FAQs

Starbucks borrows billions from its own customers… with gift cards? ›

Starbucks is sitting on $1.77 billion worth of unredeemed gift cards, functioning as a mini bank. The company earns revenue from these balances, but its main business of selling coffee is declining, with a 2% reduction in North America revenue and a 3% reduction in global revenues.

On the contrary, Starbucks makes even more money when they don't use it. A striking example of that is the fact that in 2021, Starbucks made $155 million in non-taxable profit from unused loyalty and gift card money.

said customers have $1.77 billion stored in unredeemed gift cards, up 9% from the previous year, its fiscal third-quarter results show.

Over the last five years Starbucks has claimed nearly $900 million in unspent gift card and app money as corporate revenue, boosting corporate profits and inflating executive bonuses.”

Starbucks claimed $215 million in unspent gift card revenue in its 2023 fiscal year, according to its filing with the Securities and Exchange Commission. The WCPC claims the firm kept $894 million in the last five years.

Starbucks claims $181 Million in revenue from unused gift cards and loyalty credits. Starbucks also has ~$1 billion in interest-free loans from customers depositing money onto Starbucks cards. These gift cards and digital balances, make up about $1.6 billion in stored value card liabilities.

What we do fund is food aid for communities in need. The Starbucks Foundation, along with global licensee partners, have provided over $3 million to World Central Kitchen to provide more than 1 million meals to families in Gaza. Our hearts break for all affected by the violence and conflict in the Middle East.

Starbucks sells beverages, food, and other items in 84 global markets. The company gets the vast majority of sales from beverages and from its North America segment, comprised of the U.S. and Canada.

With numbers like that, it's understandable why Tu calls Starbucks the worst bank in the world. It's holding $1.6 billion, which is far more than what many banks and credit unions manage. It also doesn't need to pay out any interest, and in fact, it often gets to keep over 10% of that money.

The partnership with Starbucks is offered through Bank of America's BankAmeriDeals program. Launched in 2012, BankAmeriDeals allows more than 45 million Bank of America clients to earn cash back on deals they choose when they pay for everyday purchases with an eligible Bank of America debit or credit card.

What is the Starbucks money scandal? ›

How Starbucks Is Allegedly Collecting Money From Customers. According to a recent complaint by the Washington Consumer Protection Coalition, Starbucks has been wrongfully collecting money from customers through its “rewards” app—over $900 million in corporate revenue over the past 5 years.

Starbucks, the coffee chain that has long portrayed itself as an ethical business and fair employer, is being sued by a US consumer group that claims its image is a deception that hides multiple instances of labor and human rights violations in the making of its products.

Hundreds of complaints have been filed with the NLRB accusing Starbucks of unlawful labor practices such as firing union supporters, spying on workers and closing stores during labor campaigns. Starbucks has denied wrongdoing and said it respects the right of workers to choose whether to unionize.

Unless otherwise required by law or permitted by this Agreement, the dollar value on your Starbucks Card is nonrefundable and may not be redeemed for cash. The value on your Starbucks Card is not insured by the Federal Deposit Insurance Corporation (FDIC), nor does it earn interest.

100 Stars may be redeemed for one (1) of the following items: hot brewed coffee or hot steeped tea, iced brewed coffee or iced brewed tea, OR a bakery item (such as a cake pop or cookie), OR a packaged snack (such as popcorn or potato chips) OR one (1) Cold Siren Logo Plastic To-Go Cup (24 oz only) or one (1) Siren ...

Starbucks gift cards never expire.

The value on your Starbucks Card is not insured by the Federal Deposit Insurance Corporation (FDIC), nor does it earn interest. Most Starbucks stores in North America including Puerto Rico accept your Starbucks Card.

Earning Stars

Stars cannot be earned on purchases of alcohol, Starbucks Cards or Starbucks Card reloads. Earn 1 Star per $1 spent when you scan your member barcode in the app, then pay with cash, credit/debit cards or mobile wallets at participating stores.

Some methods are available to turn a Starbucks gift card into cash. Your Starbucks gift card may be exchanged for cash through trusted exchange companies, internet markets, or neighbourhood gift card kiosks.

Gift Card Marketing Foster Customers' Loyalty

For instance, a business can offer redeemable merchandise once customers purchase a certain amount of products. This strategy will give them more reason to visit the shop as they know they will gain something if they continue using their card.