Great power comes from a great prepaid program. Since launching its first card in 2001, Starbucks has achieved tremendous success with its prepaid program. Today, the coffee mega-chain boasts more than $1.2 billion loaded onto its cards and mobile app.
The volume of consumers’ cash stored on Starbucks cards is impressive in its own right. What’s even more impressive, however, is that this figure exceeds the deposits at many financial institutions (FIs). California Republic Bancorp, Mercantile Bank Corp and Discover Financial Services are just a few of the FIs outmatched by Starbucks’s deposits.
To win back consumers prone to depositing their money in Starbucks accounts, credit unions should consider bolstering their prepaid programs with strategies straight out of the Starbucks playbook. These may include:
- Adopting a robust rewards program. By pairing rewards with prepaid cards, Starbucks has successfully transformed a transaction device into a program that attracts (and retains) loyal consumers. Rewards as simple as free beverages work wonders in increasing consumers’ card usage.
- Introducing rewards points for a variety of behaviors. Starbucks does not limit its rewards points to purchases made exclusively in its retail locations. Instead, consumers are rewarded with Star Codes for purchasing specially marked Starbucks products at grocery stores.
- Integrating with a mobile app. Consumers receiving physical Starbucks prepaid cards can easily link those to their mobile accounts. They then have the option to make purchases with the card or the mobile app and reap the rewards.
- Offering a variety of card designs. Each year, Starbucks releases prepaid cards with holiday themes, colorful designs and other embellishments. While these cards have the same functionality as less flashy ones, they may be more aesthetically pleasing to consumers. Additionally, they offer a personalized touch for consumers getting prepaid cards for special occasions.
- Establishing an “elite” group. For its highest rewards earners, Starbucks offers “gold level” status. Reaching this level comes with special perks including free refills, special promotions and a personalized card. Additionally, it fosters a sense of exclusivity among consumers.
Credit unions looking to advance their prepaid offerings should take advantage of the lessons found in the Starbucks business model. The secret to success lies not only with the coffee, but also with a simple, incentivizing program.