Coffee sellers go after Starbucks gift cards

When you have absolutely no idea what to get someone for Christmas, there's always a Starbucks (SBUX) gift card. That seems to be the prevailing sentiment every December, because an estimated one in 10 adults reportedly receive Starbucks gift cards each year.

But Starbucks isn't everyone's cup of tea. If you don't want the card, some smaller roasters will happily trade you some of their coffee for it.

In Dallas, a shop called Stupid Good Coffee is accepting the cards as payment, even though owner Daniel Harmon admits to Eater Dallas that it's "not really advantageous for us in a long-term sense." He's pretty much giving away his coffee, and he knows it. But Harmon thinks it will get his cafe's name out there and "let people know that there's other options."

Online coffee purveyor Tonx is just as ambitious, allowing people to go online, enter their Starbucks gift card balances and receive that amount in Tonx store credit. It's created a website called "a better way to spend your gift card," it lays out the numbers: $38 at Starbucks will get you eight frappuccinos, 11 cappuccinos or 17 drip coffees. But the same amount at Tonx will get you 48 cups of coffee.

"A coffee ritual shouldn't have to include traffic, long lines and valuable time to acquire not-so-fresh beans and poorly crafted coffee," the company says. 

Tonx mails its customers coffee beans every two weeks at a cost of $19 per shipment. Each shipment is a surprise, writes The Los Angeles Times, and might include coffee from central Kenya or Brazil.

So what will Tonx do with a bunch of Starbucks gift cards? Surely founder Tony Konecny isn't going to load up on frappuccinos, is he? Konecny apparently has a thing for a certain item in the pastry case. "We have several options available," he told Grub Street, "my favorite being banana bread. Lots and lots of banana bread."

Starbucks isn't sweating it. The company pulled in $3.8 billion in revenue in its last reported quarter, a 13 percent increase from a year earlier. And no matter where all those gift cards end up, Starbucks still gets to count the revenue from their initial purchase.
  • Kim Peterson

    Kim Peterson is a financial journalist covering business and the economy. She has written for several online and print publications, including MSN Money and The Seattle Times.