Tuesday, June 24, 2014

The Cost of a Starbucks "Free" Drink

On Friday morning, I spent over seven dollars on coffee. Seven dollars and thirteen cents on one, singular coffee.

Getting a big, huge quad venti soy latte happens to be the treat I always give myself after volunteering overnight at the homeless shelter. Those cots are not very comfortable to sleep on, making it difficult to sleep very well, so when I pull myself out of the sagging bed at 5:50 in the morning, it makes it slightly easier to know I have a big coffee to look forward to enjoying.

It used to work out that every time I volunteered at the shelter I happened to also have enough stars from Starbucks to get this big treat for free, but since I've cut back on my Starbucks trips, it no longer always lines up that way. So while I'm used to my big coffee, and I look forward to having it, paying that much money for it is somewhat new. On one hand, it's a good sign because it means that I've spent less overall at Starbucks, but on the other hand, seven dollars is an awful lot of money for one caffeinated beverage.

Friday's coffee got me thinking about whether Starbucks loyalty stars are worth it, so I decided to do the math. (It was also funny timing, considering Starbucks announced a price increase on Friday, which goes into effect for some areas today.) Pret a Manger is another chain shop that sells lattes near me, so I used it as a reference point. Both lattes were 12 oz, had two shots of espresso, and used soy for the milk. This is the drink I most commonly get from Starbucks. The Starbucks version came to $4.95, and the Pret a Manger version came to a total of $3.58.

But Starbucks has a loyalty rewards program and Pret a Manger does not. It takes twelve purchases at Starbucks to receive a free drink or food item, which can be anything not bottled, including my big $7.13 drink. This seems like a pretty good deal, but is it? Here's the breakdown for 13 lattes...

Pret a Manger: $3.58 x 13 lattes = $46.54
Starbucks:  $4.95 x 12 lattes (the 13th is free) = $59.40
Difference: Pret a Manger is cheaper by $12.86

That's a big difference! Even my $7.13 free coffee doesn't end up making Starbucks a better deal for me, as there is still $5.73 left over.

Unlike with my lattes, if one buys regular brewed, drip coffee from Starbucks at around $2.50 per cup, but uses the free reward for an expensive latte or food item, Starbucks rewards would actually pay for themselves. According to Starbucks, however, "only a small proportion of customers buy just a tall coffee." So for most of us, checking the math is a good idea.

Knowing the difference in actual cost may not mean that Starbucks is out of the question, but if there are other options nearby, checking the actual cost and starting to visit other coffee shops more frequently may be beneficial... Especially when one considers how much the difference adds up to in a year.

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