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Is Starbucks a Bank? Hold onto your Starbucks drink ☕️, because you might be surprised to learn that Starbucks isn't just a coffee giant – it could be considered a bank as well! 🏦 Starbucks boasts over 40,000 stores worldwide, raking in a cool $35 billion annually. But a staggering 45% of that revenue comes from their loyalty program. So, how does this program turn them into a bank? The Starbuck's Card 💳 Starbucks' tiered loyalty program offers various benefits. Upon registration, you receive a Starbucks card – the key player in this whole "bank" concept. Here's the catch: to earn stars for free coffee (2 stars per dollar spent) ☕️, you need to pre-load your card. Considering their coffee costs around $2-$3, and with a reported 40 million active members, if each person adds just $50 a month 💵: Starbucks could potentially hold a reserve of $2 billion! 💰 And guess what? Their latest annual report shows they have a cool $1.7 billion in customer cash! That's a hefty amount of readily available cash – more than most average banks in the US! 💵 Benefit for Starbucks? Interest-Free Loans: Customers essentially provide Starbucks with an interest-free loan . Guaranteed Future Revenue: Since funds are locked in for coffee purchases, Starbucks can predict future income 📈. The next time you load your Starbucks card, remember: you might be giving them an interest-free loan 💵. https://lnkd.in/diCwZMzh What do you think about this strategy? Let me know in the comments below! 💬👇 #businesscasestudies #contentcreator

Fun Fact: Did You Know Starbucks is a Bank? ☕🏦 Starbucks currently has a staggering $1.64 billion in unused gift cards, effectively making it a ‘bank’! 💳💰 Unlike traditional banks, where you deposit cash and withdraw it whenever needed, at Starbucks, you deposit money in the form of gift cards and withdraw it through coffee and treats. This unique system allows Starbucks to hold onto a significant amount of cash, providing them with a substantial financial cushion. It’s fascinating how a coffee company can accumulate such a vast amount of unused funds. ☕📈 #Starbucks #Banking #Finance #FunFact #FinancialInsight

☕ A coffee house on the outside, and a financial institution behind the scenes, Starbucks is Secretly a Massive Bank 💸. 🤑 Established in 2009, my Starbucks reward system is the core of this. On the surface, it's a loyalty card where the customers load money from their debit/credit card and in return get Loyalty Stars on every purchase. Starbucks receives upfront funds, enabling interest earnings and short-term, low-risk investments without customer knowledge, akin to obtaining interest-free loans. For customers, they can redeem these stars for free food, drinks, or other merchandise. For example, after 10 stars you get a free drink. And who doesn't love free stuff? 😏 Some interesting numbers here: 👉 Even though the return is just 0.05%, with 29 Million Starbucks reward members around the world, Starbucks earns up to $10 Billion through the Loyalty program. 👉 By deposit size, Starbucks can rank in the top 2% of US banks 👉 Starbucks earns around $155 Million per year just from the customers who forget money in their cards. On an individual level, it might not seem a life-changing amount, but collectively it's a massive business. Now, other brands are also leveraging their brand identity and strong established customer base to use similar models to get additional revenues. How do you feel about it?!   #StrategicPlanning #BusinessInsights #ConsumerInsight #ProductManagement #BusinessStrategy #Marketing

Starbucks is secretly a bank: It may be one of the biggest banks in America. Here’s why: The Starbucks card can be topped up with cash to spend at any Starbucks, giving users rewards for their purchases. The total balance on Starbucks cards is over $1.6 billion. In other words, customers are lending Starbucks $1.6 billion in cash… at 0% interest! To put that in perspective, 85% of US banks have less than $1b in total assets. Starbucks isn’t regulated as a bank because users can’t withdraw their balance as cash. This means they aren’t effected by various regulations, including the need to hold a large cash balance in case of mass withdrawals. They are free to spend this loan on whatever they want, such as opening 350+ new stores per quarter. To top it off, the Starbucks app is the second most used mobile point-of-sale payment platform in the US, sitting between Apple Pay and Google Pay.

This is an interesting perspective on rechargeable gift cards.

𝗕𝗔𝗡𝗞𝗜𝗡𝗚 𝗢𝗡 𝗖𝗢𝗙𝗙𝗘𝗘 Who would've thought a coffee corporation could act like a bank? 🤔 We live in a consumer-driven landscape where the boundaries of individual business sectors are becoming more and more blurred. Some companies are realizing one of the best ways to make money is to be in the business of money, i.e. the financial sector. 💲 Apple with its credit card is a good example, but a less expected player in this space is the world-renowned coffee company Starbucks. Yes, Starbucks. They found a way to invest customer money without their knowledge or even providing any returns to the customer. But how can they do it legally? The answer lies in the MyStarbucksRewards system 🌟. This is how it works. You load up funds using your credit or debit card and then Starbucks instantly receives the cash. Meanwhile, you earn a digital currency called stars, which accumulates with every purchase. Eventually, these stars can be exchanged for food, drinks, or other merchandise. What most customers don't realize is that Starbucks is actually earning interest on their money while they wait to purchase their next coffee. The company invests this money in short-term, low-risk ventures. The return is about 0.05%, but with 29 million members around the world, it can be very lucrative. And they're certainly not alone doing this clever scheme. Amazon, Apple, Walmart, Target, and Costco are a few examples that are also mixing primary goods and services with financial services. They rely on their strong customer base and brand identity to find success in this model. So what does it mean for you? 🤷♀️ I'm glad you asked. Is this a win-win situation? On one hand, customers get free items and convenience. On the other, they are essentially giving the company a free loan to finance their business operations. Some argue that it might even encourage increased spending. What do you think? Should Starbucks be more transparent about their use of consumer funds? Is what they're doing OK as long as customers are happy? #Starbucks #banks #money #coffee

While there were zero-interest rates following the GFC, moving your cash out of a bank account cost you almost nothing. Now that rates have climbed materially, it's a different story. In the 1990s there was a lot of talk about saving your money from a Starbucks morning latte. The impact of this "program" was greatly overstated. But today, with spending cards paying no interest, people who are loading hundreds of dollars a month onto these cards can actually miss out. These types of programs are so prevalent that Starbucks is actually holding more cash than a lot of companies you would associate with... well, finance. Where is the platform that can tie this out for you? Well, we think we're building it. Right here. Enjoy that morning jolt but take 10 minutes and do the math before you "bank" with your favorite coffeeshop and send them an interest-free loan. "Before long, splashing the cash at your local Starbucks might become a thing of the past. 41 percent of the coffee chain's customers in the U.S. and Canada now pay for their beverages and snacks after loading money onto their Starbuck's card. With 12 million loyalty members in the U.S. alone, the coffee chain boasts more customer money on its cards than many banks have in deposits." https://lnkd.in/g4FzjhHC

This Starbucks secret blows my mind... 🙀 Every purchase you make with your Starbucks Rewards account earns you loyalty points, known as Stars. ✨ And guess what? These Stars are like golden tickets that you can redeem for complimentary treats or discounts on your next Starbucks visit! 🍪🥤 But here's the kicker: Did you know that Starbucks, through its loyalty program, collects a whopping amount of cash that rivals some banks? 💼💰 In 2016, Starbucks held an astonishing $1.2 billion in customer deposits. That's more than what some banks like Customers Bank and Green Dot had in their vaults, with $0.78 billion and $0.56 billion, respectively. 😲💸 So, next time you load up your Starbucks Rewards account, remember, you're not just getting coffee; you're becoming a part of something as big as a bank! ☕💳💼 Read more at: https://lnkd.in/edqGRBQn #StarbucksRewards #CoffeeLovers #LoyaltyProgram #StarbucksSecret #money #entrepreneur #sales

Third time's a charm? Bank of America and Starbucks have announced a NEW LOYALTY PARTNERSHIP whereby BoA credit and debit card customers can link a card to the Starbucks app to earn 2% cash back plus one Starbucks Bonus Star per $2 spent. 🤝The launch combines BankAmeriDeals (launched in 2012 and now has 45 million customers) with Starbucks Rewards (launched in 2009 and now has 34 million customers). 💡Brand power. Can Starbucks finally leverage its brand power and much-lauded loyalty program into a successful financial services partnership? This will be its third major attempt. In 2009 the company launched the Duetto Card, initially issued by Bank One (subsequently Chase) which was discontinued shortly after, and then in 2018 it launched the Starbucks Rewards Visa with Chase which was discontinued in 2023. Less ambitious than a co-branded credit card, a loyalty partnership acknowledges these challenges while still trying to unlock new opportunities for customer engagement and potentially also for growth. It should be a win-win for both brands but success will depend on getting the message out. Mintel Comperemedia #marketing #advertisingandmarketing #loyalty #cashback #defaultcard