Starbucks is boldly going where no business has gone before. The Seattle-based coffee chain is offering a $450 gift card. It's no ordinary gift card. The Starbucks Metal Card is not made of plastic, it's made of steel. Each specially etched card is loaded with $400 cash, but it costs $50 to make, adding up to the eye-popping price tag.
Starbucks will make only 5,000 of them. They'll only be sold via the luxury goods website, Gilt.com. The card comes with gold-level Starbucks card membership benefits, such as gifts and freebie refills on brewed coffee and tea.
"Some stores will never even see this card," Ryan Records, vice president of card and payments at Starbucks, told USA Today.
But not everyone is impressed. "This is a card for the 1%," says cultural anthropologist Robbie Blinkoff. "It's all about status, and to tell you the truth, I don't know if I'd want to be seen with one of these."
The move by Starbucks blends two growing trends: consumer love of gift cards and upper-end exclusivity. The costly gift card follows another recent, pricey rollout: a limited brew coffee sold in 46 Starbucks stores, which fetches $7 for a 16-ounce cup.
"I won't be at all surprised to see other retailers follow," says National Retail Federation vice president of operations Daniel Butler.
More Starbucks Coming To A Corner Near You
Starbucks is also ready for some major expansion in the United States, and around the world. The chain is planning to add at least 1,500 cafes all around America in the next five years. The plan would boost the number of stores by 13%.
Worldwide, the company says it will have more than 20,000 cafes by 2014, up from its current count of about 18,000. Much of that growth will come from China, which the company says will surpass Canada as its second-biggest market.
Although Starbucks has been intensifying its growth overseas and building its packaged goods business back at home, the majority of its revenue still comes from its more than 11,100 cafes in the United States.
The upbeat expansion plans mark a turnaround from Starbucks' struggles during the recession. After hitting a rough patch, the company brought back Schultz as CEO in 2008 and embarked on massive restructuring effort that included closing 10 percent of its U.S. stores.
Cliff Burrows, who heads Starbucks' domestic business, said the problem wasn't that Starbucks was oversaturated, but that the company hadn't been careful about its store openings. That led to cafes in locations where signs or traffic might not be optimal, he said.
Burrows said Starbucks has gotten more sophisticated, and noted that the cafes opened in recent years are among the company's best performers.