Starbucks customers in NYC are upset about the $2.01 tall coffee

Until Jan. 3, a tall coffee at a Starbucks in Manhattan cost less than $2. Then prices went up; customers are now forced to find two bills -- and a penny. One coffee-drinker tells the New York Times:

"It’s the stupidity of it. It’s what I’d call ‘the annoyance factor.’ It’s ridiculous. Why the extra penny? Who has pennies? Didn’t anyone think this through? Couldn’t they round down or even up? Why leave it at a penny?"

Apparently some baristas are helping customers by dipping into their tip jars for the penny -- "a practice that would cut the baristas’ income, if it continued," notes the Times writer.

Baristas in Manhattan stores -- what do you think? (Other employees and customers are invited to weigh in, too.)

* A Starbucks price increase to a not-so-round number

Comments

[Herman]

Let's ignore New York state and city sales tax of 8.875% and stick the entire blame on Starbucks.

[Coffee Drinker]

1. A million pennies per day adds up for all concerned.
2. Go ahead an round up. Hand over that nickel, dime, or better, a quarter and include the change with your dollar tip.
3. See #1. Those pennies make baristas smile.

Be generous--you know you want to.

[Venti Urnex Latte]

They could always do give-a-penny-take-a-penny -- separate from the tip jar. Lots of delis in the city do that.

[Coffee Soldier]

Good call Herman...same thing where I am..price increase and customers roll their eyes and make snide comments but almost 9% is going to the state (that they chose to live in!!!)

[Starbucks Gossip webmaster]

Herman -- Starbucks did the math and knew the price of a tall coffee (with NYC tax) would be $2.01. The company says so in the article. The question raised by many is, why did it price it that way so customers would have to dig for the penny?

I pay with my iPhone app so this is a non-issue for me. The writer wonders if SBUX purposely did this to force others to switch to a card or the mobile app. Good question.

[Redacted]

Yes SB webmaster, IMHO, Starbucks is sly like a fox. This was done to encourage use of the Starbucks Card and Starbucks App (for Apple and Android).

I wonder what percentage of transactions are already cashless. My observation is greater than 50%.

[abe]

In today's ny times,Jim Olson, Starbucks vp of global communications ,assures us that the company "thinks holistically about prices and the value it provides customers".
What a bunch of voodoo speak........price it at $2.00 or $2.05......"holistic pricing" , good lord , is it 2012 or 1984 ?

[anabels]

People still pay in cash? I'm in New Zealand and here most people use their EFTPOS card ofr the majority of transactions. The only thing I pay cash for is bus fares because I keep forgetting to load my bus card!

[Joy]

Of course people still pay in cash! (And if you've ever been to the developing world, you'd know that cash remains the most dependable way to pay.)

[STL_Nick]

Well yeah if I'm in Port-au-Prince or Santo Domingo I'm gonna pay in cash, but in Manhattan I'm gonna pay with a card. No one here is talking about the developing world.

[Martha]

Question: When people have been paying $3 and get back 99c change, does it make them more apt to put that change in the tip jar?

I work at BN and we don't really get tips (unless a customer forces it on us), so I'm curious. :)

[P]

a grande coffee has been 2.01 in my town for 2 years now. people need to get over it and adapt. we have plenty of people who are exact change customers who somehow manage to find two dollars and a penny nearly every day.

[frapatte]

What's the reasonable change level to make this less outrageous? 2 cents? 5 cents? 10 cents? 13 cents?

[Anon]

I never have cash anymore. Direct Depoist, app card, debit cards with no charge for any amount (12 cents on a debit card? Ok.)

There just isn't any reason to get cash anymore.

[Waltie]

If you don't want to pay for a coffee, don't buy it. I'm sorry, but having to pull out two bills and a piece of change takes the same amount of energy as pulling out one bill and some change.

Starbucks Gossip -- and perhaps society as we know it -- as officially jumped the shark.

[I <3 music]

NY has the in the go attitude. This wouldn't mean much to a lot of other cities.

[Jazzz]

WOW...Manhattanites really do think the world revolves around them...

1. NY tax is high (I know, hey I live here too).

2. Get a Starbucks Card and use it! Then you never have to deal w/ change ever again and it's quicker too.

3. Deal w/ it Manhattan.

[seo training in multan]

I love coffee beans nice header.

[Mila]

don't like coffee

[nothappyanymore]

It's all about perception. 1.99 seems like a lot less than 2.01. Starbucks should take sales tax and perception and think. Not that this won't simmer down and people won't keep buying starbucks. They will.

[Siberiabux]

The same thing happened in 2005 when a grande coffee went from $1.95 to $2.01. Customers complained to high hell and after three weeks or so the price for just that item was reduced one cent to avoid the penny issues. I think the more bizarre thing is that not all manhattan prices are the same: there is a geographic pricing range that ends at 125 ST, so store in upper manhattan are 10-30 cents cheaper than downtown. Talk about inconsistency..

[spence]

Obviously, the rent prices need to be taken into consideration when choosing the prices. A rent of $1000 vs $4000 makes a huge difference in profit margin. And the store with the $4,000 in rent isn't necessarily selling 2000 more coffees. Or even 1,500.

[I give people free pennies]

It doesn't matter. I always round up change if it's 1-2 cent difference. Can't be assed to sort the change.

Only exception, if you're extremely rude, ugly, annoying, then i'll give you even smaller denominations of change.

[Mansi Takyar]

If I were a part of Starbucks Marketing team, I would offer a penny discount on every 2nd Starbuck tall coffee the customer would take from Manhattan store in order to balance the frustration with the strategy of discount. With a penny discount, I don't think Starbuck would face a big loss but rather a bit more customer satisfaction.

[Waltie]

"It doesn't matter. I always round up change if it's 1-2 cent difference. Can't be assed to sort the change.

Only exception, if you're extremely rude, ugly, annoying, then i'll give you even smaller denominations of change."

What does this mean? You're not giving people correct change? I'm confused.

[cardiff]

I was really surprised in New Zealand to see how no one uses cash there.

Most people pay in cash here (UK), probably about 75%.

I think the US is unique in that the price on the menu board is not the price that you pay at the tills. Most other countries include the tax in the displayed price.

[Judy]

"Only exception, if you're extremely rude, ugly, annoying, then i'll give you even smaller denominations of change."

I get the "rude" and "annoying" part, but some of the nicest people I know are, shall we say, "appearance challenged"

[nothappyanymore]

What? you won't be assed? that is very funny.

[The Moar You Know]

DO NOT pull the penny out of the tip jar. A world of potential grief lies down that path.

[spence]

When I was a newbie, I pulled a penny from the tip jar for a man so he wouldn't have to break a bill. A seasoned barista gave me a dirty look, I was embarrased and the customer saw it. He reached into his wallet and put $5 in the tip jar. I'll always remember him for his kindness.

[StarbucksOnomist]

Many of these comments are really "missing the boat." First, it's an annoyance -- and a sign of a company that isn't thinking through all its decisions -- to have a drink priced out to $x.01. Who does that? This is likely to lead to reduced coffee consumption--an obvious bad thing for the company. Second, as someone above pointed out, there is a psychological advantage to being able to charge $1.99 rather than $2.xx. It "feels" a lot less expensive -- this is a well-known tactic in many industries. Again, the failure to incorporate this BASIC marketing tactic into the pricing is concerning because it further suggests a company which isn't thinking through its decisionmaking. And yes, New York as the largest city in the United States is a significant enough market to really take the time to think about these sort of pricing decisions.

[Coffee Drinker]

The more Starbucks raises their prices, the smaller my coffee. I used to have 1 - 3 Ventis per day, at more than one location when I lived in a big city.

I downsized to tall, then grande (or whichever is the smaller of the two) and now will stick with SHORT which isn't on the board or mentioned even when you ask for "the smallest coffee you have." I learned of short on this site. Now with free refills I just always get a refill. Still, I'd on occasion go in with my Tall tumbler to be green...not sure I'll do that now.

Yes going over 2 bucks is a psychological barrier, and irritation that marketing isn't thinking. For me that's the irritation. I understand the cost of living is going up for everyone and we're all juggling our luxuries the best we can.

Also re tipping: I adopted a personal policy of tipping my usual, or even a little MORE when I don't like the service. This makes my day. However, with the price increase, my tip isn't going up since I'm already tipping a buck for a 1.52 coffee. YMMV.

[Former Manager]

At my old store I HATED dealing with cash and we essentially eliminated the penny...just rounded everything. We were too busy to deal with customers digging in their pockets, or for a barista to count out $.96 (a grande was $2.04 in our market). I would gladly accept $2 if the price was $2.01. Oh and yeah...who pays with cash anymore, regardless of where you live??

[JavaJoe]

we used to leave pennies at the POS in order to cover it for customers, until i made them stop. what does someone think when they get 99 cents change? "i dont want to deal with this" then it gets tossed into the tip jar. i would say 9 out of 10 customers would throw their 99 cents into the tip jar. this is just an observation i have made.