I write a lot about struggling Americans, and there are a lot of them. Some folks persistently complain that I am merely supporting the whining class. You know the refrain: Americans have it a lot better than they ever have, that all the lines of people carrying huge TVs out of electronics stores serve as proof of this, that Americans who are in trouble are probably waste a lot of money on stupid things. Or they simply point out that life in the crazy, Restless rat-race is a choice — folks could live more simply and not have to fret about paying that $2,500-a-month mortgage. Of course, they are right, and I am right. There’s truth to all those observations. It’s my belief, looking at the numbers and spending a lifetime interviewing people, that there’s much more structural unfairness and much less wastefulness, but where you place that line is certainly a matter of honest debate.
Then, there’s the silver Starbucks card.
Once in a while, I see things that really hurt my case. I don’t shy away from them … somewhere inside my head is the training of a scientist … but they do make me let out a huge sigh.
Earlier this year, Starbucks announced it was selling a $200 gift card. Not a card loaded with $200, mind you. A card that costs $200. It’s made of silver. Real silver. It’s pretty, I guess. You carry it around like a normal gift card, swipe it to buy your $2.73 coffee like a normal gift card. Only it’s silver. So when you whip it out, everyone knows you are a silver Starbucks card holder. That means you are……cool? Rich? A devoted Starbucks drinker? An absolute fool? A BoBo in Paradise? (After all, silver lasts longer than plastic. Wait, no it doesn’t…)
Starbucks is one of the key examples in Tim Harford’s great economics book, the Undercover Economist. He explains the ‘bucks problem this way — when you walk in to buy coffee, Howard Schultz has no idea how much green you are willing to surrender to get his coffee. Maybe it’s only $2. Maybe it’s $5. The *worst* thing for Starbucks is to under-charge you…grab only $3 from your wallet when you would just as easily have spent $4. Corporations hate leaving cash on the table. On the other hand, if Starbucks charged *too* much, it would scare away too many folks towards Dunkin’ Donuts. So what’s the answer? Tiered pricing. Grande, venti, maximi. These aren’t really different sizes….at least not from a pricing perspective. They are varying price points designed to accommodate the full spectrum of money-leavers. No dollar left behind!
Someone somewhere inside Starbucks has realized that Venti still leaves money on the table. There’s a certain set of folks who would just as soon spend $20 as $2 when buying coffee. Or, apparently, $200. In recent days, stores have begun filling up with signs offering the black card of Starbucks. I asked a barista about the cards today.
“Are you really selling these? Have you sold any?”
“Yes, a couple,” he said coyly, as if he was instructed to say so. He then stressed that the card comes loaded with $50 worth of coffee, so it’s a better value than it might initially appear.
That meant my hope for humanity hadn’t been entirely dashed. He seemed a little embarrassed, and maybe they aren’t really selling at all. Then I went to Starbucks website a few minutes later. Where I spotted the following message:
“This product has sold out online.”
Apparently, there’s a rush to buy $200 silver Starbucks cards, even when the cards are usually free, and even when those free cards have really cutesy designs like penguins and mini coffee cups. Imagine if the silver card came in the shape of a Starbucks cup! For the person who, literally, has so much of everything that the cash must be burdensome to carry around.
Knowing what I know about marketing, I thought that perhaps the crafty marketing folks inside Starbucks were creating a false buying panic…that the sold-out message had more to do with, ahem, supply then demand. Then, I read the reviews on Starbucks website. (I think they’re real, because if they were fake, Starbucks would be breaking the law. Plus, they sound real.)
“Bought the first one and was so impressed with the quality that I bought another. I will probably use one as a keychain and keep the other one in it’s packaging as I know this one will be very collectible.”
Indeed. These seem to be the baseball cards of gift cards.
There’s a lot of complaining about the packaging making the cards somehow clunky to use and scan. But not to worry. One clever buyer has a solution.
“Scan your card with your smart phone,” the silver card fan writes. “The Starbucks app shows the card with the code which is easily scannable. This would also let you leave your precious silver card at home with no fear of it being stolen or lost. ”
So that $200 Starbucks card is awesome, but it works best if you load it into your smartphone and don’t actually use the card itself. The free card works great. The $200 card works so badly that you can’t really use it. Unless you digitize it, which instantly makes the silver card useless. Perhaps some folks have too much money to spend.
Don’t worry, the writer seems to appreciate the irony of this: “The downside to this is you will not have the pleasure of showing off your precious silver possession and earn admiring looks in a Starbucks location when you flash it out to pay.”
I’m going to go back to writing stories about how real wages and incomes in the U.S. have been flat for decades, and how even parents with great dual incomes still have no idea how they will pay for their kids’ college. And I’m going to try not to think about the Starbucks silver card. Please don’t bring this up again.
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I have two and they work well. Waiting for the Gold one to be made. Everyone has a right to voice their opinion.
My grandmother has this same exact card and it works just fine