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Why Starbucks Gold is more like poo.

Monday, November 17th, 2008

Frequent visitors, or even casual visitors to Starbucks locations in the Bay Area have recently been bombarded with a Starbucks promotion for their new reward program.  Unlike their previous program (which is still available), this is a membership program similar to Costco’s annual membership.  You have to pay $25 / year to start and you get to save 10% automatically on any purchases (with a few exclusions).  One of the fringe benefits is you can get 2 hours of free Wifi daily at any SBUX with a Wifi access point.

Here is why I think this is a bum deal for the consumer.  Not counting the other benefits, which are designed to suck you into this impulse buy, to recoup your $25 purchase, you would have to buy $250 worth of stuff every year.  Assuming you go for the large specialty drink at ~$4.50 each, that’s about 56 drinks per year.  That is a bit over 1 drink / week.  This is just to break even.  You’re much better off getting a 20% discount by buying $100 worth of gift cards at Costco for $80.