Lately I have been reading about a trend where independent coffee houses are offering to allow people to use Starbucks gift cards in their establishments. I will admit this puzzles me. In my job, we have a competing store that has done the same thing, that if you go in with my stores gift certificate, they will allow you to use it.
From a marketing standpoint, I get it. From a bottom line, I think that is horrible business. In essence, you are not taking any money, and you are giving away products/drinks. The gift card/certificates have no monetary value to your business, and to be honest, Starbucks already has the money. So if I have a $10 Starbucks card, and use it at "Ye Olde Local CoffeeHouse" that business is basically giving me $10 worth of food and drink. That can't be good for margins.
Perhaps there is someone with a bit more business know how than I have can explain it to me.
Again, I get it from a marketing standpoint. Rally around the local business, and don't use the big pots' card. But the big guy already has the money, and doesn't care if you come in and redeem it or not.
So who is really being helped?
Charlie
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