Starbucks claims $181M in revenue from unused gift cards (2022) (opens in new tab)

Highway tolls in France have been doing it for something like 20 years.

>delayed billing, which converted multiple separate song transactions into one bundled transaction to save on credit card transaction fees.

Uber and Lyft do it now. It ought to be illegal, or opt-in (with a discount to the customer). Delayed billing wreaks havoc on the majority of Americans who live paycheck to paycheck

That seems deeply unethical and, at least in California, illegal. Not something I’d brag about in any case.

I can see that leading to resentment among your clientele over time.

There's almost always a consequence for not providing value, and if 45% is unclaimed, that's not valuable to anyone but you.

I'd also wonder why so little goes claimed. I'd be worried about my product or service if people didn't want it, even if it was gifted to them.

Sleazy, unethical, and probably illegal. As an example: Kansas for instance, among other states, has unclaimed property law and these things must be turned over to the state.

That seems...sleazy.

There are various websites that let you sell basically any gift card for like 80% of face value, such as cardcash.com. That's what I do with nearly every gift card I am ever given.

Gift cards from work always go in the trash, they are a hassle to remember you have one, tote it around or redeem it at a place I probably don't frequent enough.

Think about it this way: many people derive peace-of-mind from giving a gift whose purpose is known. Now, I can hand someone $20 and hope they don't spend it on booze, drugs, or prostitutes. Or I can hand someone a gift card, knowing they will spend it on Starbucks (not that expensive coffee isn't on a spectrum of vices anyway.)

I can't put my finger on it, but as someone who has wholeheartedly embraced a "cashless society" vision, I feel better about gifting people with gift cards instead of cash. I don't know if it's any safer to send them through the mail, but it seems customary to tuck one into a greeting card, so that's how I treat my relatives on special days. I often keep a gas station card on hand, because I don't drive, and it can be real useful to offer a fill-up to someone who gives me a much-needed ride.

But it’s more thoughtful. The purchaser thought long and hard about what place the purchasee can use it in.

Convert your US Dollars to Starbucks Dollars!

Starbucks gift cards don't expire. It's standard account practice to recognize a percentage of your unused gift card balance as revenue as no company ever sees 100% redemption rates of gift cards. They call this "breakage".

I think that's also true in most of the US for first-party gift cards like Starbucks.

The typical offenders for expiration dates and/or fees are bank-issued gift cards that run via a credit card network. Does the Alberta regulation cover those?

This is no longer allowed in most of the US.

Yikes that seems insane, do you remember which vendor it was?

The interest free loan is more like $1B dollars. This $181M is the breakage, the left over gift card balances that are unlikely to be redeemed and they are recognizing as revenue. e.g. The $2 left on a $20 gift card that someone doesn't bother redeeming.

They also get another $1B of deposits from people loading money onto their app to pay for drinks. Starbucks is basically sitting on the equivalent of a small banks deposits at any given time.

From Starbucks' web site:

"We do not charge any activation, service, dormancy or inactivity fees in connection with your Starbucks Card. Your Starbucks Card has no expiration date nor does the value on your Starbucks Card ever expire."