“I got the name Slash because I used to work in a grocery store and I was in charge of reducing prices for really big sales.”
–Slash of Guns N’ Roses
Recently, Starbucks sold a travel mug which the purchaser could use to buy a month’s worth of unlimited brewed coffee for $30. Even though we did not purchase the mug and had purchased it the year before, it’s an offer that pulls at Monkey Brain’s heartstrings and makes him want to become a caffeine junkie.
Ironically, on the same day Starbucks made their offer, Atlantic magazine published an article on why unlimited coffee may be good for you.
Why did this look like such a good deal?
This is the type of offer that appeals to Monkey Brain on a lot of levels.
- It gives the perception of unlimited use for a limited price. Monkey Brain sees this offer and thinks that he’s going to get you in the car and drag you to Starbucks every day (and twice on Sunday) to guzzle as much coffee as you can possibly consume and forego sleep for the next month while you shake and twitch enough to power a small town. He forgets that you have other priorities in life and going to Starbucks every day probably isn’t high on the list. In reality, it’ll be more like a gym membership, where you sign up and then rarely go.
- Divide by 30. Even though January has 31 days, it’s easy enough to round down to 30, particularly since a lot of months have 30 days, and think “$1 per cup.” Monkey Brain then compares the price of $1 per cup to the normal Starbucks price of around $2 per cup and thinks “Whoo! Sale! 50% off!” Yes, even Monkey Brain can do that type of math.
- Substitution of time. Monkey Brain thinks about all of the time that you have to spend slaving over a coffee pot, brewing, pouring, cleaning, watching, and waiting. He then thinks of the instant gratification of having the smiling barista handing you a steaming hot cup of lava coffee. What Monkey Brain doesn’t think about is the extra time you have to take to drive to Starbucks, wait in line, clean the mug anyway, etc. Essentially, he’s trading the time he can see – you making coffee – and discounting the time in the future – having to drive to the place every single day.
Does this mean that I unequivocally say that the deal is bad for every single person out there? No. There is one group for whom this is a great deal.
Since the average cup of Starbucks coffee is about $2.20, if you go to Starbucks consistently for 14 or more times a month and were going to go at least 14 times in January, then this deal would have been worth it, since $30 divided by $2.20 is less than 14 times $2.20.
Otherwise, you just let Monkey Brain buy you a nice new travel mug for $30.
- John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.
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