Starbucks announced that it will introduce a new Starbucks Visa card, which can be combined with its highly successful stored-value card, which currently is used for roughly seven percent of total store sales.
In addition to offering latte drinkers a line of credit, the new credit card also will create a reward component that will allow users to earn free products and rebates when using it.
"Unlike airline tickets, these rewards can be immediate," Howard Schultz, Starbucks chairman and CEO, told The New York Times. "We are doing something that has never been done before, which we think is compatible with our brand and what our customers have come to expect from us."
In addition to offering latte drinkers a line of credit, the new credit card also will create a reward component that will allow users to earn free products and rebates when using it.
"Unlike airline tickets, these rewards can be immediate," Howard Schultz, Starbucks chairman and CEO, told The New York Times. "We are doing something that has never been done before, which we think is compatible with our brand and what our customers have come to expect from us."
- KC's View:
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This new venture has some pitfalls, it seems to us, simply because the coffee retailer runs the risk of being grouped in with all the other annoying companies that deluge American consumers with credit card offers. In addition, if Visa takes it on the chin in the lawsuit that has been filed against it by Wal-Mart and thousands of other retailers, having a Visa alliance may not be the most reputation-enhancing place to be.
That said, it isn’t like Visa is going to vanish. And, judging by how successful the stored value card has been for Starbucks, this combination does suggest some intriguing marketing possibilities.
