Description: Starbucks (SBUX) is slowly adding a shot of banking to its grande coffee empire. As customers pour money into its gift cards and its mobile-payment app, the Seattle-based company is booking a tidy profit simply by holding onto customers’ cash.

Source: Businessweek.com

Date: Jan 24, 2014

Link: http://www.businessweek.com/articles/2014-01-24/starbucks-just-sold-1-dot-4-billion-in-gift-cards-dot-what-did-it-do-with-that-cash#r=hpt-ls

Questions for Discussions:

• How does this strategy affect cash flow and other financial issues at the company?
• Are there any risks inherent in holding so much cash advances?