Comments on Silicon MBA: Starbucks Refill Policy is Now Worse!

The best quality coffees can be purchased online, ...

2011-11-24T07:53:19.016-08:00

The best quality coffees can be purchased online, from the many small roasters.
Two of my favorites are La Colombe and Awhaw, but there are others. Compared to the large coffee shops, the taste and quality of these fresh roasted coffees are outstanding.
They use a much higher quality arabica bean and your order is always delivered fresh roasted.

The new policy is a joke. The price of regular cof...

2010-10-06T12:22:16.500-07:00

The new policy is a joke. The price of regular coffee and cost of refills are marginal and do not affect the bottom line. Star$$% makes most of their profit on frappuccinos, sandwiches and other high priced/ high profit items.
That's what happens when a company, even as good as Starbucks, becomes too big and too powerful.

Those who lie to get free coffee are simply thieve...

2010-08-24T09:09:58.560-07:00

Those who lie to get free coffee are simply thieves.

I have had the benefit of free refills all day for years. I buy lots of other stuff due to those late day refills, so free refills late in the day is a win-win. I just came back from a visit to Waikiki, and since they didn't honor this policy, I decided to try other local coffee places and liked their product better. That's a win-lose situation. I believe that the fixed overhead of most businesses with high profit margin sales far outweights the small benefit of paying full price for refills due to loss of refill and other sales.

Actually, by using a tumbler, you can get free cof...

2010-08-17T19:10:32.125-07:00

Actually, by using a tumbler, you can get free coffee all the time. Just dump your last coffee early in the morning before entering the store and while it is busy, you go in and ask for a refill. There are people getting free drink for a year and a half now, and bragged about never paying for the coffee as they received a bailout from Starbucks during their period of unemployment.

FYI, just left this on SB's contact us page: ...

2010-07-31T16:47:25.027-07:00

FYI, just left this on SB's contact us page:

I am about fed up with Starbucks punishing its best customers! Hopefully I have your attention. Long ago I stopped at Starbucks a couple of times a month, then I learned that I could get refills for 50 cents and decided to only come to Starbucks for my coffee which meant I visited at least once per day, so now 20-30 times per month. Then I was "sold" on a rewards card by one of YOUR employees to get free refills. I then frequented even more and many times upgraded to mixed coffee drinks because of the free refills I was receiving...the bottomline was more money spent at your stores, which is the goal of your program and was a win-win, SB's got more of my money and I got what I wanted...life was good. At least until SB got greedy, I had bought 2 $15 tumblers rather than dealing with the paper cups (more money for SB's) but quickly grew tired of being treated like a thief when I got a refill and was actually told once by an employee "we dont have any way of knowing that you dont just get free coffee all the time"... I have had my own business for 12 years and it takes a real idiot to call your customer a thief to their face. Now I am being told that the FREE refill only pertains to the same store within a one hour time frame....frankly this is fraud! This is not the "reward" I was sold on and a really good way to screw and piss off a customer that spends a minimum of $60-$100 per month on my coffee alone, not to mention an average of another $50-$100 per month on my clients as "thank yous" Your response to this will determine if my $1200-$2400 a year stays or goes.....and I have a very big mouth and have been preaching my love for SB's up until this...I will be more than happy to share the story of SB's greed as well.....

After buying a "Clover brewed" coffee fo...

2010-06-28T10:20:12.622-07:00

After buying a "Clover brewed" coffee for $2.60 at one Starbucks in one location, and then getting refill later at another (free on my Gold Card), the store person hit me over the head with "oh, you can't do that, you have to buy the first one here". I was stunned as the whole point of the Starbucks Card is you can track purchases (you know, those things called "computers").

I recently came across your post and have been rea...

2010-06-25T12:08:36.726-07:00

I recently came across your post and have been reading along. I thought I would leave my first comment. I don't know what to say except that it caught my interest and you've provided informative points. I will visit this blog often.

Thank you,

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HI Griffin, Peet's Coffee and Tea is an indepe...

2010-06-21T16:08:14.463-07:00

HI Griffin, Peet's Coffee and Tea is an independent company.

http://www.google.com/finance?client=ob&q=NASDAQ:PEET

i love how everyone is switching to Peet's whi...

2010-06-21T15:57:12.965-07:00

i love how everyone is switching to Peet's which is just another company owned by...you guessed it, STARBUCKS!! idiots.

and when you say mediocre, you mean average... but I digress.

I too will be frequenting Peets instead of Starbucks from March, but that has more to do with the fact that I am moving to a new building w/ a Peets in the lobby instead of a Starbucks.

I think SiliconMBA's point is that the marginal cost of brewing one pot of coffee is so small as to be basically free, compared with Starbucks other operating costs... so it is almost certainly in their best interest to keep the foot traffic coming through the door for refills.

When you say a delicious cup of coffee you should ...

2010-01-01T12:59:27.562-08:00

When you say a delicious cup of coffee you should say a mediocre cup of coffee.

You need to learn more about coffee, Starbucks coffee tastes awful.

The math could be much easier than what a previous...

2009-12-30T07:02:31.233-08:00

The math could be much easier than what a previous post included. Only taking into account pure revenue, the comparison is $2.00 vs $0.50. For this to work out in Starbucks' favor, they would need 1 customer to pay full price for a "refill" for every 4 customers that would have paid the reduced price of $0.50 for a refill. If you are considering the profit associated with both comparison points, I'd guess that the ratio would be even more in favor of charging full price for a refill. Other posts have mentioned the value of having customers enter the store because they may buy other things. This is true, but I still wouldn't be so quick to say that Starbucks doesn't know what they are doing. As a customer, I'm with all of you in that they should stick with the $0.50 (or free) refill. The policy probably needed some refinement to limit those who have abused it (never paying the full price for a new cup of coffee).

I just got hired at Starbucks in August, and wasn&...

2009-12-16T20:27:20.656-08:00

I just got hired at Starbucks in August, and wasn't too familiar with the policy until my manager and I had a lengthy discussion about it. I hate the new policy. I'm very good at what I do, and when I lose a customer over something as stupid as Starbucks' new refill policy, it puts me in a very difficult place. The conversation is incredibly awkward. Not only am I creating enemies for myself, but also for Starbucks. I swear the top execs up in Seattle are morons.

I just got the explanation from my local Starbucks...

2009-11-09T11:03:30.617-08:00

I just got the explanation from my local Starbucks. Well, I too will be visiting a whole lot less. I think I'm gonna resort to the free stuff at work. So there, now, they'll get none of my money.

2009-08-29T14:55:22.345-07:00

This comment has been removed by a blog administrator.

A starbucks employee went through a whole explanat...

2009-06-13T02:41:52.619-07:00

A starbucks employee went through a whole explanation with me. It was really elaborate.

I know. I've already started shifting my coffee $$...

2009-03-30T10:08:00.000-07:00

I know. I've already started shifting my coffee $$$ to Peet's and Blue Bottle.

What a travesty! You're putting those baristas' k...

2009-03-30T09:11:00.000-07:00

What a travesty! You're putting those baristas' kids through college, and that's how they thank you??

Thanks for your comment. Rather than guessing how ...

2009-03-25T10:36:00.000-07:00

Thanks for your comment. Rather than guessing how accurate the 5 variables in your equation are, here's a better way to think about it:

Coffee (and anything else they sell) is a very high margin item (80-90%). Therefore their primary goal is to drive the throughput of customers. Just by a customer walking in the door, they are creating positive expected value for starbucks.

Anything that reduces transaction volume destroys value, anything that increases it creates value.

Lets think about the cost of running a coffee shop...

2009-03-24T20:48:00.000-07:00

Lets think about the cost of running a coffee shop per month, say you have 15000 transactions per month, 500 per day.

monthly bills
rent: 4500
payroll: 21000
utiliies: 2500
=28000/15000= .53

.53 pays only for the store to be open and staffed, let alone stocked with product.