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Posted: 6:00 a.m. Thursday, Dec. 6, 2012

Starbucks' new gift card redefines rip-off



By Clark Howard


Starbucks is offering a new $400 gift card that's being sold for $450.

Wait one mocha-frappe-no-fat-no-whip-one-pump-of-classic-and-half-a-pump-of-raspberry-syrup minute!

$450 for a $400 gift card?!

You probably know that I'm no fan of gift cards, unless you get more than you pay for above and beyond the purchase price. But the Starbucks Metal Card, available only in a limited-edition run of 5,000, throws the traditional business model out the window.

The java giant justifies the $50 premium charge by saying it covers production costs for the stainless steel card. And then they make the card only available through the flash sale site Gilt.com. You can't buy it in a Starbucks location!

Um, OK.

The reality is, Starbucks can do this because they're doing so well. The company recently announced they plan to open 1,500 more stores. No doubt they've survived the recession in style.

But I don't want you to even think about buying one of these gift cards. That almost seems arrogant to me, selling the card for more than its stated value. Because it's a fancy card?!

Meanwhile, coffee prices are dropping at wholesale, down by 52%. That's a big change from last year when we had a coffee shortage. Now, we have oversupply of Arabica beans. So if you make your own coffee at home, it will be a whole lot cheaper.