With the earnings season in full swing, this tweet just blew my mind:

JP Koning further writes about this on his blog:

Starbucks has around $1.6 billion in stored value card liabilities outstanding. This represents the sum of all physical gift cards held in customer’s wallets as well as the digital value of electronic balances held in the Starbucks Mobile App.* It amounts to ~6% of all of the company’s liabilities.

This is a pretty incredible number. Stored value card liabilities are the money that you, oh loyal Starbucks customer, use to buy coffee. What you might not realize is that these balances  simultaneously function as a loan to Starbucks. Starbucks doesn’t pay any interest on balances held in the Starbucks app or gift cards. You, the loyal customer, are providing the company with free debt.

And I thought Starbucks sold coffee (average coffee). The more I read, it feels like they are a bank (unregulated) where we have loaned them money for an interest rate of a free coffee every 120 points.

Let that sink in.