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Card-carrying drinkers unite

Gift cards are all the rage these days, but nowhere has it caught on as well as with Starbucks' frequent guzzlers.

By ASSOCIATED PRESS
Published December 6, 2006


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SEATTLE - If there are eight people in line at a typical Starbucks, chances are one of them paid up before even setting foot in the store.

In the five years since the Seattle coffee retailer launched its Starbucks Card, it has become a fixture in the wallets of millions of loyal customers. It has emerged as one of the company's most heavily promoted and hottest-selling holiday gift items.

Most major retailers have been offering gift and loyalty cards for years, but industry observers say few have seen so many of their customers hang on to them as long, use them as often and reload them as regularly as they do at Starbucks.

"It's unique in the sense that most retailers aren't the kind where you have that everyday purchase," said Scott Krugman of the National Retail Federation.

During last year's holiday shopping season, customers activated a record 15-million cards that raked in nearly $170-million once they were redeemed, accounting for 12 percent of the company's North American revenue stream that quarter.

"The card has exceeded our expectations, absolutely," said Sandra Stark, Starbucks' director of marketing program management. "We knew it would be a great program. We had no idea that we would reach 12 percent of tender."

About 96-million Starbucks cards have been activated in the United States and Canada since November 2001, and customers have reloaded their cards about 38.6-million times, bringing in $2.17-billion in revenue.

In early November, Starbucks started offering its card in Britain, selling so many it had to order more than double the number in the initial batch to keep up with demand.

Some fast-food restaurants have jumped into the fray recently.

Wendy's International Inc. started promoting its new gift card around Thanksgiving. "Cards have become so commonplace in the retail sector that you really need to have one to be able to compete effectively," spokesman Bob Bertini said.

McDonald's and Burger King began offering customers reloadable convenience cards about a year ago. Both say they're pleased with the results they've seen but would not share sales figures.

96-million Approximate number of Starbucks cards activated in the United States and Canada since November 2001.

38.6-million Approximate number of times customers have reloaded cards.

$2.17-billion revenue from the cards.

[Last modified December 6, 2006, 00:27:53]


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