Starbucks Gift Cards Are Kind of a Scam—Here's Why
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Even if you don't, Starbucks' financial results certainly do. Due to a staggeringly huge number of phantom clients who did not utilise their gift cards, the enormous coffee company with headquarters in Seattle generated more than $200 million in sales this year.
Everyone has received a Starbucks gift card at some point, whether as a business giveaway, stocking stuffer, or informal everyday gift. However, an astonishingly high number of individuals reportedly never use their coffee money.
Starbucks estimated that "breakage," or money from unsold gift cards, contributed an amazing $212.7 million in income for the 2022 fiscal year. That much cash is likely concealed deep inside numerous wallets and in sofa cushions.
Gift cards from Starbucks have long been in demand, especially around the holidays. Each holiday season, customers worldwide spend billions on Starbucks gift cards.
The SOC is a coalition of unions that supports the unionisation of Starbucks employees. To put it plainly, Starbucks has been hostile to internal employee unionisation initiatives.
Starbucks publishes so little about breakage that for investors, it is essentially a "black box" about this important and perhaps material aspect of Starbucks' financial health.
Overall, Starbucks has definitely benefited from the gift card business. Just last year, customers spent $13.5 billion on Starbucks gift cards, and by the end of the fiscal year on October 2nd, $1.5 billion remained on those cards.
Gift cards from Starbucks never expire. The coffee company asserts that a percentage of the unclaimed cash won't ever be redeemed due to historical redemption rates and are therefore "identified as breakage over time in proportion to stored-value card redemptions."