Wednesday, March 23, 2016

Getting Screwed (a little) By Starbucks

On April 12, 2016, Starbucks is adjusting their customer loyalty program. Instead of one Star per purchase, with a free item every 12 stars, you will now earn 2 Stars per dollar you spend, and need to collect 125 Stars for a free item. Additionally, at the transition any Stars you have on April 12 will be multiplied by 11.

I did a little analysis of whether the transition and ongoing purchases are more or less rewarding under the new regime. It is (unsurprisingly) sensitive to what your average purchase is. Here's the numbers:

Not to spoil the surprise, but if your average purchase is less than $5.21, you will not be receiving as many rewards as you used to. For example, someone who spends $3.50 per day will now have to spend $62.50 for a freebie instead of $42. They are getting a 5.6% return on their purchases instead of the 8.3% they used to. That's a pretty big haircut.

Then again, you're spending $3.50 for something with a make-at-home cost of less than $0.50 plus the amortization of whatever equipment you use. If you buy a $400 espresso maker and it lasts for four years of daily-weekday coffee (250/year), that's an extra $0.40, for less than $1.00 total.

Actually, if you're going to go that route, the new Starbucks rewards plan is a great change for you. You'll now get a free bag of beans after every five bags instead of every 12.

Thursday, March 17, 2016

Fight back against net anti-neutrality

I just sent this message to the FCC via -- I would recommend you do as well.
Dear FCC, 
Please don't let self-interested actors gut your brave and excellent work in preventing them from violating one of the internet's most fundamental operating principles: net neutrality. As a collaborative form of communication, the internet has thrived when all connected networks have been fair, balanced and unbiased towards the traffic passing over them. 
Previously, the attempts to capture the internet focused on charging content providers for unimpeded data transmission to the customers of an ISP. When that consumer requests content from a paying content provider, service is fast and efficient. When that consumer requests content from a non-paying content provider, service is throttled. This was stopped by last year's ruling. 
Now, networks are implementing plans where total data for a customer is capped, followed by a reduction in level of service when the cap is exceeded. They are exempting their own content or the content of a paying content provider from affecting those caps. The equation is the same whether the network constraint is on the service provided or the source of the data. The outcome is identical if the behavior at the consuming endpoint is impaired when a non-exempt data source serves data. The outcome is against the Title II rules. 
Please act to enforce the rules and keep the internet open and thriving.