Starbucks' Gift Card Sales Reach 'Stunning Record'
Long-time Starbucks CEO Howard Schultz is stepping down from the job in April, according to CNBC, but he's leaving on a high note if the chain's gift cards are any indication. The coffee giant just released the results of its fiscal first quarter for 2023, which was highlighted by $8.7 billion in sales. It was a quarterly record for the company, Schultz reported during a recent earnings call, per The Motley Fool. Not only that but of the 10 best sales days Starbucks has ever had in North America, eight were recorded during the last quarter.
Perhaps the most remarkable fact to come to light during Schultz's earnings call – his last with the company, observes The Motley Fool – had to do with Starbucks' gift cards. These gift cards have always been a big revenue generator for Starbucks, particularly during holidays, when as Business Insider notes, they're commonly exchanged among family, friends, and co-workers. It's the amount left unspent on these cards that's really an attention grabber, however. During 2021, for example, Starbucks earned $181 million dollars through unused gift card benefits; in 2020, that number was $145 million, per Bloomberg. But these figures arguably pale in comparison to the amount left unspent on Starbucks' gift cards during the last fiscal quarter, confirms The Motley Fool.
Starbucks' gift cards sales break record during last fiscal quarter
Howard Schultz reportedly claimed during a 2022 earnings call that Starbucks' booming gift card business had grown larger than the whole gift card industry, per Business Insider. So one would imagine it would take a lot of bucks to impress him. Starbucks saw $3.3 billion dollars put on gift cards during the last quarter, a number Schultz himself described as a "stunning record," according to Nation's Restaurant News. Perhaps even more extraordinary, however, was the amount left unspent on these cards during the quarter: $2 billion dollars, per the earnings call transcript published by The Motley Fool.
These gift cards can remain active for three or more years without a purchase, the company's website explains. Still, the amount of unspent credit on gift cards is significant, and not just to Starbucks. Last November, a complaint was lodged against Starbucks with the Securities and Exchange Commission, seeking more transparency in regard to the company's revenue from these unspent gift cards, Bloomberg noted.
The complaint was ostensibly made on behalf of investors, but the organization behind it – the Strategic Organizing Center – is union-affiliated, and Starbucks has recently seen unionizing efforts at many of its U.S.-based cafés, per Bloomberg.