Local coffee shop brewing up new business through gift card buyout program

Alchemy Coffee’s program offers customers the chance to exchange Starbucks gift cards for credit at the locally-owned business.

February 2, 2016; 9:31 AM • by Trevor Dickerson

If you received a Starbucks gift card over the holidays but a locally-roasted cup of joe is more your style, one local business has your back.

Eric Spivack, owner of Alchemy Coffee, said he noticed several years ago that many of his regular customers would pass by his cart on VCU’s Monroe Park Campus after the holidays. “You notice when regulars don’t stop by,” he said, noting that this particular cart has a fairly loyal following. After noticing more and more customers passing him by, he approached a couple to ask them what was up.

Spivack learned that many of them, a majority being students, received Starbucks gift cards for the holidays and wanted to exhaust their funds at the corporate coffee chain before returning to Alchemy. “I asked, on the spot, what if I gave you money for the (Starbucks) card in exchange for credit to [Alchemy]?”

The idea was a hit. Spivack began the program, rather informally, around two years ago. Since then, he’s collected upwards of $1,500 in Starbucks gift cards, most worth between $5 and $20 apiece. “People can’t believe we do it–they don’t understand.” But once explained, most are on board.

While he had ideas like ordering a “stupid expensive” Starbucks drink like this one costing over $93 as a marketing stunt–the most expensive to date–but ultimately settled on selling the cards on gift card auction sites.

Spivack sells the cards for less than their actual worth on the auction sites, but he sees it as a great promotional tool. “I’m fine spending money on [the program] because it’s a marketing spend,” he said.

In addition to retaining existing customers, Spivack says he’s attracted a significant amount of new business through the gift card buyout program. To his knowledge, only two other coffee shops in the country have similar buyout models.

Alchemy Coffee started as a mobile coffee truck that roved local farmers markets and other events and grew to include a brick-and-mortar shop known as The Lab inside The Depot at VCU.