Starbucks gift card sales jump as shoppers seek safe bet

NEW YORK: Starbucks Corp. (SBUX) sold about 16 percent more gift cards in the U.S. during the 2014 holiday season as shoppers increasingly defaulted to the fail-safe option of treating their loved ones to lattes and Frappuccinos.

About 37 million gift cards were sold during the holiday season this year, up from about 32 million last year, the Seattle-based company said in an e-mail. More than $1.1 billion was loaded onto Starbucks gift cards between Nov. 3 and Dec. 25 in the U.S. and Canada, where a combined 40 million cards were sold, Starbucks said. The world's largest coffee-shop chain, with almost 12,000 cafes in the U.S., is an easy choice for consumers seeking the convenience of gift cards, said Darren Tristano, executive vice president at Chicago-based research firm Technomic Inc. Its stores are everywhere, and many customers visit almost daily. "It becomes a safe bet," he said. "We don't want to give gift cards to people that we're not sure they're going to use."

In 2013, Starbucks customers across the globe loaded $1.4 billion onto gift cards, including $1.3 billion in the U.S. and Canada, between October and December. Starbucks hasn't yet released numbers for the corresponding period in 2014. Starbucks said almost 2.5 million gift cards were activated on Christmas Eve this year, up from nearly 2 million sold that day last year. More than $20 billion has been loaded onto Starbucks gift cards since the program originated 13 years ago, the company said in a press release before Christmas.

The gift-card program reached new heights this year when the coffee chain sold a $200 Starbucks Card keychain that's made with sterling silver and comes loaded with $50. The item sold out online and was available only in limited quantities at certain stores nationwide. Starbucks also offers monogrammed cards for $5. Gift cards increase the amount of money customers spend when they're in a Starbucks store, and the company should see a boost in sales in the first part of the year as coffee drinkers start to redeem the cards, Tristano said. "It's a significant part of what they do," he said.