1. What is it about Starbucks that allows the company to sell a gift card for $50 more than the $400 in merchandise the card can purchase? Should a brand be allowed to do that?
2. How has Starbucks positioned its brand? Could this premium gift card offer or $7 cup of coffee harm Starbucks' brand image?
For the second year right around the holidays, Starbucks offered the Limited Edition Medal Starbucks Card for $450, entitling the holder to $400 of Starbucks drinks, goodies, and gold-level Starbucks membership status. The other $50 was to cover the cost to make the handcrafted, rose-colored, laser-etched steel card. Sounds crazy, doesn't it? Well, 1,000 of the super-premium cards, which could only be purchased at the luxury goods Web site Gilt.com, sold out within minutes. Then they popped up on eBay selling at $500 to $1,000! The premium cards are refillable, allowing owners elite exclusivity. Some criticized Starbucks, claiming it is a card "for the 1%" and saying it is "all about status" and that holders of the premium card have something others don't. Starbucks also rolled out a pricey brew for the other 99 percent, charging $7 a cup.