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If There Is No Free Lunch, Maybe There Are Free Drinks.

|Includes: EBAY, Starbucks Corporation (SBUX)

Don't Ever Pay For Starbucks

If you can get something for free, yet you pay for it, you're a fool.

If you can justify paying over 5 bucks for coffee, maybe you've been fooled.

Starbucks(NASDAQ:SBUX) has a reward program which gives you a free drink every 12 transactions you make with one of their "reward/gift cards".

After 5 transactions you are entitled to free refills, and after 30 transactions you are entitled to a shiny gold card with your name on it.

If you go to Starbucks regularly, you should use the card anyway. If you buy standard black coffee say for $2, and every 12 transactions you indulge in a $5 drink, you're getting a 20% discount on the market value of the drinks.
If everytime you go you also sit around for a while and get a free refill, you're getting 50% discount on the value of the drinks.

The only problem is, you're still paying money.

Here is the trick.

Any transaction you make with a starbucks reward card gets you a star, and after 12 stars, you get a free drink.

Even buying a gift/ reward card, gets you a star.

And you can transfer the money from one gift card to another.

I hope you've figured it out by now, the idea is you buy a gift card transfer the balance back to your card, rinse and repeat.

The more money you have on the card, the quicker you get through the process because you can buy more cards in a single visit. Make sure to ask the cashier to record each card as an individual transaction. If they frown, smile.

I don't even like starbucks that much. The coffee I brew myself tastes better. But I did it anyway to make a mockery of the system.

If you like starbucks get more for your money. Everytime you buy something, buy it with the rewards card, and buy a bunch of gift cards. In individual transactions

If not, join me in mocking Starbucks for selling overpriced Coffee.

  1. Buy a gift card for $5, and register it on starbucks.com
  2. To speed up the process by a discounted gift card off Ebay(NASDAQ:EBAY). Find auctions where you can make an offer. I aim for 20% discount to face value. Ones where sellers just send you the card numbers are the best.
  3. Buy a load of gift cards, until you get to 30 transactions. They will be sending you a shiny card with your name on it. If in the process of buying cards you see a specific themed one, get it, some crazy collectors are repurchasing them on ebay even if they have no money loaded.
  4. Everytime you get a free drink, spend a few hours at starbucks sorting emails, or whatever, and make the most of the free refills.
  5. Once you hit 30 transactions. Forget about starbucks. Since you have to use the money, buy something from the Starbucks store, ideally something that's on discount to add to the discount you got when purchasing the card from ebay. I chose to get a stainless steel travel mug, which was 30% off regular price. Given that I had bought a 30$ gift card for 24$, I effectively got the travel mug for half price.
  6. Whatever remaining balance is on the card, buy one last gift card, and actually gift it to a friend. Tell that friend to read this blog post.
  7. Receive your Gold Card and take pride in being a loyal Starbucks customer!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.