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Starbucks' Holiday Strategy: Deep Discounts, Loyalty Programs

Starbucks' Holiday Strategy: Deep Discounts, Loyalty Programs


Amid slipping sales, Starbucks Coffee has unveiled several plans to boost holiday consumer spending.

This year, the coffee titan will sell five $20 gift cards for the discounted price of $80 — the first time ever that Starbucks has offered a gift card for less than face value. These gift cards, available only at discount retailer Costco, have been flying off shelves. In the promotion's first month, the company has sold nearly 1 million gift cards.

Starbucks is also rolling out its new gold-card loyalty program. The gold card, which can be purchased for $25, allows cardholders 10 percent off most items except gift cards and digital downloads. The company anticipates that millions of gold cards will be sold to customers who are existing cardholders of the regular Starbucks card, as it will save them more money.

Holiday gifts will also be at a lower price point this year. Many stores will also have $10 or less gift tables, and some items, such as CDs and coffee samplers, will retail at a price that is roughly 13 percent lower than similar items last year.

Do you think these promotions will increase sales, or is Starbucks trying too many different things at once? Will you be signing up for the gold card, or racing to Costco for the discounted gift cards?

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