|
|||
|
Editor's Note Carding Customers Bill Winkelman, director, Starbucks Card, told me that the card's success has been "a pleasant surprise." He says the Starbucks Card is somewhat different from typical gift cards offered by retailers, such as The Gap, in that it is more of a daily-use card in a quick-serve environment. And because of that, the learning curve was distinctbut one that could be applied to smaller coffee retailers. Winkelman says it's very possible for smaller retailers to use stand-alone machines vs. full-blown POS systems to implement a stored-value card program and that there are several service companies out there. He's not kidding. Do a Yahoo search with key words "stored value cards" or "transaction services" and you'll get more info than you ever wanted. I called one of these companies from my search, Swipegiftcard.com, and found out that just in the last year, stored-value/gift card programs have become much more cost-effective for smaller retailers, and that many transaction service companies are now targeting the small guys. David McKinney, vice president of Swipegiftcard.com, says that when considering a card provider, retailers need to ask about per-transaction costs, actual card costs and minimums, stand-alone machine costs (lease or buy) vs. POS integration, and monthly service fees. Even though start-up costs can be daunting for smaller retailers, McKinney says the plastic cards can pay off if marketed properly. Inexpensive marketing tools include using cards as employee nametags, creating press releases for local papers, and training employees to inform customers about card availability and its advantages. While cost considerations are important, so are the benefits. There's the customer convenience factor (faster service, less cash handling); cash up front or "float" from card buyers; breakage (amount of money from cards that remain unused); inherent customer loyalty; transaction tracking; and built-in brand marketing. Some also say customers tend to spend more when they're using plastic and not cash. If you consider me an average consumer, then I confirm that notion. For Starbucks, Winkelman says the core benefit is speeding customers through transactions. (I did bring up the float factor, but Winkelman rejected it as a core benefit, categorizing it instead as a pleasant byproduct. Pleasant indeed.) I actually did a field test and tried out a stored-value card at a local Starbucks. The transaction time was probably 5 to 7 seconds faster than a typical cash transaction, which can add up in a high-volume shop. Considering Starbucks was able to capture $32 million (2.3 million cards averaging $10 to $25 per card) in the first quarter with not much more than a press release for promotion, it might be worth dealing yourself in the card game.
To reach me, write Specialty Coffee Retailer , 115 S. Mitchell Ave.; Arlington Heights, IL 60005; phone: (847) 394-9011; fax: (847) 394-9022; e-mail at sgillerlain@mail.aip.com. Copyright
© 1999-2002 Adams Business Media, Inc. Please
Note: Some pictures or diagrams are only Originally
published - March 2002
|
Editor's
Note
|
||
You've
probably heard or read about Starbucks' new cash or "stored-value" cards, allowing
customers to pick up a latte without fumbling around for dollars and coins.
Customers can purchase Starbucks Cards and load them with any monetary denomination
from $5 to $500, then use them just as they would use cash or credit cards in
store or online. When the card's balance gets low, it can be reloaded in person
at a Starbucks location, via Starbucks' 800 number or online.
