Starbucks Prepaid Card: The Next Generation

Oct 13, 2003

By George Anderson

The next generation of the successful Starbucks prepaid card is the first to also serve as a credit card, reports USA Today.

The new card, Duetto, rolling out today, allows consumers to prepay for purchases made at Starbucks while serving as a credit card in any other establishment that accepts Visa.

Consumers using the credit card function will earn one percent in Duetto Dollars, which are loaded directly onto the prepaid feature of the card for redemption at Starbucks.

The first generation card has been used in 95 million transactions generating $350 million in revenues.

Analyst, David Geraty, of RBC Capital Markets says the Starbucks prepaid card contributes about 30% to the sales growth at stores open at least one year.

Moderator’s Comment: What are your thoughts on Starbucks’ new Duetto card?

The good news is that, for consumers already using the Starbucks prepaid card, this is pretty much a no-brainer. They continue to enjoy the paperless hassle
of using the card at Starbucks while earning points towards future purchases when they shop elsewhere. The Duetto card does not carry an annual fee.

The challenge and corresponding opportunity for Starbucks will be whether the Duetto card program will be successful in attracting new users. [George
Anderson – Moderator

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