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Ooooh do the one where hitting ‘payment’ on the app buys $25 of store credit by default rather than just paying and deducts the 9.64 from that credit. Then whe
by AnotherGoodName 8mo ago
Ooooh do the one where hitting ‘payment’ on the app buys $25 of store credit by default rather than just paying and deducts the 9.64 from that credit.
Then when you spend down the credit to $2 any attempt to buy something that costs more
refills the credit.
Starbucks app btw. You have to specifically pay with card on the payment screen to avoid buying credit and paying as above.
- gib444 8mo agoThat is wild
- reactordev 8mo agoI've been trapped for 15 years!
- disillusioned 8mo agoEinstein's Bagels does this asinine shit, too, like I want to bank with a fucking mediocre bagel joint.
- ipnon 8mo agoThis is called a float business in finance. Starbucks has more than a billion dollars in unredeemed balances, and they make ~$200 million per year in interest with this cash. They're basically a bank with a coffee shop side hustle.
- gcau 8mo agoIf they're intentionally causing the customer to have an unspendable balance, knowing that it's making them $200m/yr, how is that not fraud (or some kind of crime)? I'd expect atleast CA would do something about it.
- ipnon 8mo agoCustomers agree to this when they accept the terms of the app. This is also how a debit or savings account at any bank works. Both businesses have sophisticated models to determine how and when customers are likely to make withdrawals, and based on these models they lend out the money based on acceptable risk criteria.
- sunrunner 8mo agoEven if it is in the T&Cs, this one feels like it wouldn’t actually hold up? Expecting people to read those for most simple sign ups is already a high baseline, and Starbucks is not technically a banks and offers no consumer protections (FSCS or other), so that feels knowingly misleading, even if the total balances held are small per customer. IANAL, of course.
- hakfoo 8mo agoHow are they getting 20% on a deposit that presumably could be called up at any time, and how can I get in on it when the stupid "High Yield" accounts I can find top out at around 4%?
- abustamam 8mo agoThey may buy bonds or something like that.
- deaux 8mo agoYielding a yearly 20%?
- williamdclt 8mo agoIf anyone knows of _any_ investment yielding a yearly 20% reliably, I'd certainly be interested. If Starbucks figured that out, I don't know why they're bothering making coffee.
- RexM 8mo agoFor a 20% return in a year? The numbers given have to be incorrect.
- fsckboy 8mo agolarge businesses have large cash borrowing needs. if they borrow for free from their customers, it reduces the other borrowing they would need to do, so the rate to use is not what interest rate is available to you, but rather how much interest that Starbucks would need to pay for loans that size. Furthermore, whereas dividends are taxed twice (once as profit for the company and again as regular income to the shareholder), interest is a tax deduction to the company (which decreases their taxable profits) and for a percentage of debtholders that interest income is also taxed advantageously. probably doesn't come up to 20% (unless Starbucks is in junk bond territory) but it's higher than the investment rate of 4% that you're quoting.
- deathanatos 8mo agoA quick Google suggests in 2016 it was $1.17B, and earned $21M, or 1.79%. (via https://www.amminvest.com/starbucks-sbux-float/ https://www.amminvest.com/starbucks-sbux-float/ )
- sunrunner 8mo agoI mean I’d love to have a free $21M a year, but if you’re already Starbucks then somehow it feels like pocket change compared to your actual earnings and would question if it was worth the effort.
- foepys 8mo agoBut they also have over a billion cash at hand. I imagine at that scale and customers being private, the amount is pretty stable and Starbucks can just do whatever with this since it's extremely unlikely that customers demand all their money back at once.
- awesome_dude 8mo agoSorry, can they (customers) demand it back? I mean, once Starbucks have it, then the customers get it back via product (that has a margin included), or just leave it forever (free money!) I have a firm "No vouchers" rule because of this, the vouchers in my part of the world inexplicably "expire" if not used within a certain amount of time, cannot be redeemed for cash, and will not be honoured if the business goes belly up
- consp 8mo agoAccording the laws here they have to. Doesn't mean they won't make it difficult. And it needs to be in a separate account and business (to avoid it being drawn into a bankruptcy). Not that this has ever stopped businesses from abusing it anyway. I doubt this voucher option is available in the Dutch app because of this but I didn't bother to check.
- TylerE 8mo ago
- appplication 8mo agoThis is how a lot of transit cards work, unfortunately.
- chii 8mo agoif i recall, in singapore, the transit card costs are refundable. I think that's the only place i've seen it refundable.
- jsmith99 8mo agoLondon oyster cards also offer a refund of your pay as you go balance.
- hdgvhicv 8mo agoI suspect most people just use contactless nowadays, Especially infrequent visitors.
- williamdclt 8mo ago> Especially infrequent visitors I don't know a single resident who uses oyster (maybe kids? Dunno, I don't have kids in my social circle), infrequent visitors are actually the only ones I've seen using oyster and that's because they thought that was the only way to use transport
- Symbiote 8mo agoMany, many people use Oyster cards for monthly or annual passes.
- shiroiuma 8mo agoThey're refundable in Japan too.
- consp 8mo agoMost of those (used to) work offline too, as long as there was money on the card. Not something an online payment system or app needs to deal with.
- nayuki 8mo agoToronto Parking Authority is guilty of this. If you pay at a terminal on the street, then you're charged the exact amount needed for your parking session. If you pay using the mobile app, then it charges your credit card in increments of $20, requires your mobile phone number as an account identifier, and keeps track of your remaining monetary balance.
- BolsunBacset 8mo agoThe only saving grace here is that it goes to the municipality at least
- MarceliusK 8mo agoAt minimum, the default should be "pay exact amount"