Starbucks (Nasdaq:SBUX) may become more and more like the Warren Buffett classic.
Behold the smart phone Starbucks App. The app cleverly likes to a credit card and pulls down cash to your phone app is pre-loaded and keeps the consumer spending. Minimum down load triggers at $15. So if your account balance hit $15 or less another say $25 comes out of your credit card.
The balance now becomes an interest free loan to Starbucks. Much the same travellers cheques used to be or pre-paid credit cards or stored value cards offer now.
Lets look at some math. Starbucks will not disclose how many people use the App. But in March 2011 Mashable cogitated that 3 million people a day are using the App. Assume they can generate in time 100 million worldwide users with a minimum $15 average balance. Starbucks gets a free balance of $150 million. Increase with inflation and time the free balances work. Increase the offerings and maybe use the Starbuck`s App to buy other things the float, transaction and user fees just grow.
The Black Swan may waddle over if the Big Banks start to complain. But they will only attract attention to a good thing.
George Gutowski writes from a caveat emptor perspective. He was not drinking Starbucks as he wrote this piece. Nor does he understand why he was not drinking coffee at the time.