Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Starbucks, monetary superpower

jpkoning.blogspot.com

Post reply on HN
Print view View original

41–50 of 141 posts

Re: Starbucks, monetary superpower

#41

Post by ignoramous »

modo_ wrote: post #37
Diederich wrote: post #30

15 or so years ago, my manager at WalMart Stores Information Systems Division was previously a programmer on one of the many finance related teams. Specifically, she worked with gift cards, and one time I asked her how different state laws affected how much money WalMart could recover from those cards. She was delighted to elaborate! I don't recall the particulars of the answer, but it was eye-opening. She said that…

I'm curious if a rules engine [1] could be used instead of implementing the logic in code for something this complicated? Could fuzzy logic be used to build a case when the laws become contradictory? Maybe after the case is built it could be passed on to legal counsel for approval. [1]: https://en.wikipedia.org/wiki/Business_rules_engine

I'm wondering if constraint programming is better suited to such cases? https://en.wikipedia.org/wiki/Constraint_programming

Re: Starbucks, monetary superpower

#42

Post by nlawalker »

maurimo wrote: post #31

I keep wondering why people buy Amazon/Netflix Gift cards. Great, you converted 50$ into 50$ that can only be used on Amazon, and people may end up not using at all. This is also financing with negative interest rate.

It's $50 that can only be used on Amazon, but for a lot of people that's a pretty small limitation, especially relative to the utility of being able to transmit it over pretty much any medium.

Re: Starbucks, monetary superpower

#43

Post by ovao »

gumby wrote: post #28

> But the only way to cash out of Starbucks balances is to buy a coffee--a promise that Starbucks can always keep! By the way this isn't true in California: by law all stored value and store-credit cards last for 10 years and can be cashed out.

But how does one cash them out?

Re: Starbucks, monetary superpower

#44

Post by js2 »

ben1040 wrote: post #13

The part on "breakage" was interesting. I had recently searched my name on my state's unclaimed property bureau and found I had about $15 and change to claim. I filed the claim form, and when I got the check, the checkstub said it was from an unused Starbucks account balance. If last year they had $155 million from abandoned accounts that they could legally just pocket, I wonder how much they also had to send over to…

Hey, I didn't even know about this. I just found $10 in my name. Thanks!

Re: Starbucks, monetary superpower

#45

Post by dragonwriter »

notatoad wrote: post #38
joncrane wrote: post #35

Earlier quoted context omitted.

So they don't charge any explicit foreign exchange fees, but "Currency conversions are based on currency exchange rates applicable on the date of the Transaction." Well can't they just use a super advantageous measure there? There's no pinning to any external rate in the language.

yes, they absolutely can. but they don't. They aren't trying to run a forex business, they're trying to sell coffee so they charge a fair rate. it's not going to be the best rate possible, but it's probably a better rate than anybody else at the airport will give you.

> yes, they absolutely can. but they don't.

[citation needed]

> They aren't trying to run a forex business

Right. Particularly, they aren't trying to sell services to people price shopping for forex, is an incidental convenience provided to a customer base that literally isn't even checking prices.

Why you'd assume that the rates will be especially favorable is unclear.

Re: Starbucks, monetary superpower

#46

Post by elandrum »

nlawalker wrote: post #23

One use of Starbucks gift cards not mentioned in the article: cashing out foreign currency. "When you’re leaving a foreign country and still have some of the local currency, take it to a Starbucks and load it onto a gift card. You can use the card later in the UK, USA, Canada, Australia, Mexico, and the Republic of Ireland." https://lifehacker.com/put-leftover-foreign-currency-on-a-st...

Just be cautious here... in some countries, Starbucks has to operate as a seperate entity and use a different gift card system. For instance, Malaysia Starbucks is a different entity and the gift cards do not work between other non-Malaysia Starbucks. (At least when I was there a few years ago.)

This post from 2012 says where the gift cards must be used and redeemed in the same market: https://customerservice.starbucks.com/app/answers/detail/a_i...

> Starbucks Cards issued in Brazil, Germany, Italy, France, Japan, Korea, Malaysia, Philippines, Portugal, Russia, Singapore, Spain, Taiwan, Thailand and Turkey may only be used in the market from which they are issued.

Re: Starbucks, monetary superpower

#47

Post by ska »

gruez wrote: post #27
arafa wrote: post #14

Earlier quoted context omitted.

They can also be used for money laundering, as a result.

How would you launder money with starbucks cards? Sure, you can transfer balances with them, but that alone doesn't help you launder money. According to the treasury dept: >First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the fin…

Basically anything that is directly exchangeable for cash or useful goods and services is useful for money laundering, I would imagine.

If you can fill one with stolen CC details and then either cash out in a store or sell for a discount, that's a pretty basic launder, no?

Re: Starbucks, monetary superpower

#48

Post by drewg123 »

ska wrote: post #47
gruez wrote: post #27

Earlier quoted context omitted.

How would you launder money with starbucks cards? Sure, you can transfer balances with them, but that alone doesn't help you launder money. According to the treasury dept: >First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the fin…

Basically anything that is directly exchangeable for cash or useful goods and services is useful for money laundering, I would imagine. If you can fill one with stolen CC details and then either cash out in a store or sell for a discount, that's a pretty basic launder, no?

Being able to cash out a gift card seems like an interesting way to get a cash advance on your credit card, without paying cash advance fees. Surely the credit card companies are on to this, and prevent it somehow?

Re: Starbucks, monetary superpower

#49

Post by chipperyman573 »

cbhl wrote: post #15

The magic trick here is that Starbucks Rewards -- their "free" loyalty program -- requires using a Starbucks Card (virtual or physical) in order to make your purchases. Under the old system (prior to ~Apr 2019) you had to make $150 in purchases annually to get "Gold" status, and then you got a free reward after every ~$62.50 in Starbucks spending. The new program has no minimum, and tiered rewards between $12.50 and…

You can get a virtual card in the app and "pay" with it by loading on the exact amount you need to pay with before checking out (or just buying it in the app). So it "needs" a card, but that's really just a weird thing they didn't abstract from the app, it's not actually an inconvenience (at least to me)

Re: Starbucks, monetary superpower

#50

Post by pweezy »

I've always thought that the main reason for Starbucks to push their card and reward program is to save on per-transaction credit card fees.

By my understanding, in the US, typical merchant fees to accept a card are a flat $0.20-$0.30 transaction fee, plus 2-3% of the total dollar amount.

The article mentions the interchange fee (the 2-3%), but for small purchases the transaction fee is more significant.

I assume the majority of purchases are individuals buying a single beverage. If an average drink costs $4, a $0.30 transaction fee alone is eating 7.5% of your gross revenue. That's an absolutely huge amount.

Even if Starbucks cards are bought/topped up with a credit card, that $0.30 fee is being amortized over $20+ worth of product instead of $4 worth.

I also figured this tied in with Starbucks' contract with Square some years back - as one of Square's value props is eliminating the per-transaction fee for credit cards. Not sure why that was cancelled, though.

Post reply on HN