For some of you, grabbing your daily Starbucks order is akin to brushing your teeth every day. In my your smart money moves column, I will continue to profess that the next twenty years the cash flow management aspect of financial planning will become more important than asset management planning. Ask soon about my revolutionary cash flow transformation system coming live by the beginning of 2017. Since technology has taken over for the large part the way we pay bills, transfer money, and manage cash, you’ll see more and more companies asking you to store cash on loyalty cards.
In a review recently performed by the Wall Street Journal a study revealed that more than 1.2 billion were loaded onto Starbucks cards and the mobile app in the first quarter of 2016. The scary part is that this dollar figure amounts to more than some financial institution have in their possession. For example, Discover Financial Services had $680million in deposits while Starbucks carries more than a cool 1 billion.
Since these loyalty apps generally only send you a quick receipt of what you just purchased and no real accounting or monthly bill on what you spent, the only way you will really get a grasp on what got purchased is by going into the actual Starbucks website and then reviewing a history of your transactions. Why in the world would you want to do this at all? Well, this past week I discovered that Starbucks charged me 28 times for the same cup of coffee.
My normal Starbucks order consists of a grande Pike with a shot of hazelnut when I have the chance to stop by Starbucks a few times per month. Like many customers on these loyalty programs, I have a stored amount on my mobile app card and then an automatic reload if the balance falls below a certain level. The other week I noticed that my balance was $1.90 on the card and I knew there was a lot more on the card because I had just loaded up the card. When I checked the history of the card, I realized that Starbucks charged me 28 times for the same cup of coffee.
You’d think customer service would be first class at Starbucks, but the people at the store that charged me told me there’s “nothing we can do, call the 1-800-number”. Soooo…. It reminded me of that Seinfeld episode where Jerry says, “You can take the reservation, but you can’t HOLD the reservation. Because, really holding the reservation is the most important part.” I quickly smirked at the barista at Starbucks and told them you can take the money off the card, but you can’t put my money back on the card? Really, getting money on the card is the important part.
It took me almost forty-five minutes to get the representative to really understand what was happening with the card and the most laughable part is they were worried about my Starbucks security. As if there was a coffee pirate looking for me to buy him a latte. Eventually, after Starbucks (for my own protection) was going to issue me a gift card I convinced them to just put the money they ‘owed’ me back on to my loyalty card.
The scary part about a cashless society is that when we don’t have transparency it becomes a don’t ask don’t tell situation. The next time you step up for your morning latte or afternoon Frappuccino, check your balance to make sure you didn’t pay twice for something you enjoyed once.
Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.