Starbucks Devised a Brilliant Plan to Borrow Money From Customers (Without Getting Anybody Angry)
Plenty of Starbucks customers have been serving as a very generous lending partner–without even realizing it.
A significant portion of these ‘coffee deposits’ end up going unused. Since Starbucks digital and physical gift cards have no expiration date, Starbucks uses historical data to estimate how much the company expects will never be redeemed. The company describes this as “breakage,” and, according to Patel, Starbucks generated $141 million in revenue from it in 2019. That’s a $141 million donation to Starbucks.
https://www.inc.com/justin-bariso/starbucks-devised-a-brilliant-plan-to-borrow-money-from-customers-without-getting-anybody-angry.html
About 3% of gift cards dollars are never redeemed, or about $3 billion a year. What do companies do with all the gift cards that are never redeemed? What happens to gift card money that is never spent?
The answer is breakage revenue. And it’s one reason accountants exist. 😅
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