BARISTA EXCHANGE

full price for first cup, half off or even free sometimes for the next cup!...WHY?!

this has been on my mind for several years, so i'm just going to air it and see where everyone stands.  i'm assuming (uh-oh!) that fellow coffee shopkeeps/baristas/etc. will side with me, and that's cool.  if you don't, (not cool), but, i'd really like to understand the reasoning behind it!

the deal is:  at my location, the first cup of coffee is $2.25.  the second cup is $2.25. the third cup is, yep, $2.25.  every once in a blue moon a customer will grumble somewhat, and i know that they are thinking that at some shops you pay full price for the first cup, and sometimes the second cup is either half-priced, or, sometimes free!  (wow, i'm heading over to that shop as soon as i type this out!, right?!).

but, i'm here to tell you that when i did my christmas shopping last year, not one of the merchants i shopped with offered me a shirt, or jacket, or even a pair of socks reduced by 50% off.  and free?!...yeah, right.

to me, the whole concept spells out something like this: trouble.  i say that because, if you can legitimately charge full price for your cup of quality coffee, then how do you justify to yourself that your coffee is worth that full price if you are knocking off 50% for the next cup, or giving away that next cup?  in my mind, a customer can't help but ask themselves if that first cup is truly worth the $2.25 (or whatever).

the only exception i might see is if your shop is (possibly) trying to move product that has had less than lackluster sales.  or, if you are intentionally having a special, or a promotion, etc.

i think that those shops that do offer discounted drinks, or free refills, are doing a dis-service to the legit shops that are offering a quality product at a fair and justifiable price, no?

and don't get me wrong, i work events whereby customers are often passing by my window all day long and sometimes into the evening hours.  its not uncommon for one to buy 4,5,6 drinks throughout the course of the day...i'm not opposed to "treating" a customer at my descretion...as a way of saying thank-you.

but, next time i go car shopping, i'm going to see if the dealer offers me a 50% off deal if i buy a 2nd beamer within the hour!  maybe they'll just give me the next one free!

 

i'm really looking forward to your feedback!

(and, best of everything to everyone here in '11!)

 

sage

the coffee hound

laurel fork, va.

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because a twelve ounce coffee doesn't cost as much as a t-shirt, It's not as if the shop is losing money on a half priced refill. They're probobly making more money than if they didn't offer them, not to say that its substantial but pennies turn into dollars.

exe. customer: "do you offer refills" You: "no" Them: "ok bye"

where as my example Customer: "do you offer refills" Me: "yes, but they're half price" Them: "oh why not."

Sales are sales whether they are lackluster or not. and moving product as far as I know is and always has been a good thing.

A dont call me and my shop illegit for offering 1/2 priced refills

B if your going to bitch so much about a tiny thing like refills quit serving coffee, I heard somewhere that you don't have to offer the second T' Shirt half off if you work at American Apparell.

C Quit acting like your job is sooo hard. you work in the coffee industry for christ sake.

 

ok that was a bit much but lately I'm getting pretty annoyed by people bitching about thier "hard" jobs in the coffee industry, I know for a fact there are a ton of people out there ready for work who won't.

 

 

Those of you who batch brew your coffees probably should, but how about half off or free on cappuccinos and lattes?  Or espresso?  Why not do them - they're still cheaper than an American Apparel t-shirt.

Good question and equally good answers. We just passed our first year in business and started out offering a buy 5 get the 6th free loyalty card. We know that's VERY generous and when we told our customers we are revisiting the loyalty cards to make changes most of them recommended we go much higher, say 10 to get 1 free. We finally decided on a "buy 8 and get 1 free, but it can't exceed your average price paid per drink" and still feel as if that's fairly generous. We do like to make people feel like they're getting something for free, even though it is at our expense. You wouldn't believe how many people use those cards religiously though.

 

My point... give them a refill at a reduced cost or even for free here and there. It's better than dumping it down the drain. 

we also offer Ten punch loyalty cards on black coffee, specialty drinks, and for whole bean coffee.

Shadow said:

Good question and equally good answers. We just passed our first year in business and started out offering a buy 5 get the 6th free loyalty card. We know that's VERY generous and when we told our customers we are revisiting the loyalty cards to make changes most of them recommended we go much higher, say 10 to get 1 free. We finally decided on a "buy 8 and get 1 free, but it can't exceed your average price paid per drink" and still feel as if that's fairly generous. We do like to make people feel like they're getting something for free, even though it is at our expense. You wouldn't believe how many people use those cards religiously though.

 

My point... give them a refill at a reduced cost or even for free here and there. It's better than dumping it down the drain. 

Let's say you sell a cup for $2.00. And you sell your second cup for $1.00. For two cups of coffee, you have received $3.00, which is a 25% discount off your coffee price. I can say that most companies would be losing money if they sold all their coffee at a 25% discount (given average markups) once you consider all operating expenses - including wages. You can't just consider the cost of the ground coffee as the real cost of delivering the product. And you can't make up losses with volume. You just go down faster. If dumping brewed coffee is an issue, I'd find a more efficient method.

 

Consider a similar priced product: Would McDonalds give you a second burger for half price?

1) we do airpots out of a fetco till 11am, and refills on those are fifty cents. we pick the coffee to brew, and we only brew one. after 11am, it's all hario v60's, and there are no refill discounts. i'm not going to spend four minutes brewing a pourover only to sell it for fifty cents. however, the labor for the airpot happens once and it helps me use it up within a reasonable time frame (we only brew maybe three per day), thus the refill price.

 

2) i think a MUCH better comparison for this is beer. what bar lets you get a refill of the same beer for a discount? use that analogy with your customers.

 

3) loyalty cards are a bad idea. SCVNGR or foursquare rewards are a good idea.

Treating your own product as a commodity item will lead the customer to treat it the same way. 

 

Solution: Skip the bulk brewing. Buy better ingredients, serve a higher quality product, charge accordingly.

 

 

 

Have a look at this:

 

http://sprocoffee.com/hampden/hampdenimages/SproHampdenMenu.pdf

 

We currently offer 12 ounce brewed coffees ranging from $2.00 to $9.00 per cup.  Each cup is brewed to order, from open to close. No batch brewing. No airpots.  Ever.

 

The coffees are brewed on an open brew bar where the guest can plainly see their coffee being made in front of them.  They see the process.  They see the care. They see the work that has gone into their cup.  This justifies the price differential between other coffee places and it demonstrates why we do not offer discounted "second" cups or "unlimited refills."

 

We don't use analogies or attempt to explain why because it's plainly obvious.  Those who initially balk at some of the prices are quick to understand once they see the process.

 

Certainly, there are some people who come in looking for a faster and lower priced coffee.  In our immediate neighborhood there are a 7-Eleven, Royal Farm and another coffee shop to satisfy those needs.  We don't offer quality comparable to any of the other places and price our coffees commensurate to their value.

 

Nor do we offer "loyalty" cards, discounts, buy x get one free or similar gimmicks.  We offer quality coffee in a calm, nurturing environment. 

Here, in Australia, only chains like Starbucks and Gloria Jeans offer those types of discounts.. oh, and don't let me forget good ol' McDonalds. What is common enough are loyalty cards (usually 10 coffees will get you a free one), and I would be guessing that around 20% of cafes here do this. The other 80% are standard pay-full-price-per-coffee places, and we (as consumers) don't really expect much more. Only the apparently desperate places need a drawcard, and customers here do question why a shop may be trying to force their product out the door. Usually upon trial, those shops have fine beans but no idea how to make coffee.

If it's good coffee, people will pay. If they don't want to, they can go home to their Nescafe.

victoria, i knew common sense still existed in some area of the world, and you brought it to light with your fresh revelation here!

sage

the coffee hound

Victoria Stubbs said:

Here, in Australia, only chains like Starbucks and Gloria Jeans offer those types of discounts.. oh, and don't let me forget good ol' McDonalds. What is common enough are loyalty cards (usually 10 coffees will get you a free one), and I would be guessing that around 20% of cafes here do this. The other 80% are standard pay-full-price-per-coffee places, and we (as consumers) don't really expect much more. Only the apparently desperate places need a drawcard, and customers here do question why a shop may be trying to force their product out the door. Usually upon trial, those shops have fine beans but no idea how to make coffee.

If it's good coffee, people will pay. If they don't want to, they can go home to their Nescafe.
P.S. There's virtually no difference at the moment between $AUS and $USD -  for your info, our pricing is as follows: 8oz $3.20, 12oz $4, 16oz $4.80. This is standard, and on the rise by about 20c per year on average.

jay, from the looks of that menu, i'd say your space is more like a working art musuem...i mean that as a compliment.  it reminds me of the owl bar (not sure if its still in existence in baltimore), but bartenders there were trained artisans and their drinks were results of that art, skill, and talent by adhering to the use of the best ingredients.  thanks for being part of the discussion!

 

sage 

the coffee hound

Jay Caragay said:

Have a look at this:

 

http://sprocoffee.com/hampden/hampdenimages/SproHampdenMenu.pdf

 

We currently offer 12 ounce brewed coffees ranging from $2.00 to $9.00 per cup.  Each cup is brewed to order, from open to close. No batch brewing. No airpots.  Ever.

 

The coffees are brewed on an open brew bar where the guest can plainly see their coffee being made in front of them.  They see the process.  They see the care. They see the work that has gone into their cup.  This justifies the price differential between other coffee places and it demonstrates why we do not offer discounted "second" cups or "unlimited refills."

 

We don't use analogies or attempt to explain why because it's plainly obvious.  Those who initially balk at some of the prices are quick to understand once they see the process.

 

Certainly, there are some people who come in looking for a faster and lower priced coffee.  In our immediate neighborhood there are a 7-Eleven, Royal Farm and another coffee shop to satisfy those needs.  We don't offer quality comparable to any of the other places and price our coffees commensurate to their value.

 

Nor do we offer "loyalty" cards, discounts, buy x get one free or similar gimmicks.  We offer quality coffee in a calm, nurturing environment. 

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