Behavioral economics at Starbucks: should paper cup users be penalized?

Starbucks generates 4 billion paper cups a year, or 12 cups for every man, woman and child in America. The coffee giant knocks ten cents off beverage price for customers who bring in their own mugs, but Mark Gunther writes: "If Starbucks really wanted to save trees, it wouldn’t offer discounts to people who bring mugs. It would charge a dime to everyone who does not."


  1. Starbucks makes a fortune selling those cups to a wide array of distributors.  Want a Starbucks kiosk in your hotel.  The coffee is cheap but be prepared to pay at least .40 for the cup.  And that’s just the cup, not the lid.

    They have no motivation to get rid of the cups.

  2. We’ve had some local grocery stores start charging $.02 for bags. Customers were not impressed.

    This sounds like a great way to piss off their customers, negatively impact their ‘luxury’ brand, and reduce their ‘free’ advertising. Charging $.10 for a cup seems cheap.  

    Perhaps they could try to promote their existing programs more, or break out the cost on the bill.

    1. Aldi’s charges for bags…and I see people getting them in droves.  But of course I never do all my shopping there, so I usually only have a few items I can carry.

    2. Sturdy plastic bags usually cost 10 Cents/12 US Cents over here (Germany, one of the most competetive markets for supermarkets, even Walmart had to give up) and people still shop.

      Though most simply bring a bag or basket of of their own. 

      Flimsy  bags from the grocery  counter a free, though. 

  3. “If Starbucks really wanted to save trees, it wouldn’t offer a dime to people who bring mugs. It would charge a dime to everyone who does not.”

    So, no to incentives, yes to castigation.

    1. Correct, because incentives are not really all they’re cracked up to be. They only work consistently in a fantasy world of rational self interest.

    1.  It’s all about the psychology, though.  Here in DC, most grocery stores have offered discounts of 10 cents a bag if you bring your own bag with you, but for the most part, before last year, almost nobody did.  But then the city enacted a bag tax of five cents per bag, city-wide, and reusable bag usage has skyrocketed.  Some stores don’t even give their own discounts anymore, so the savings for bringing your own bag is actually less now than it used to be, but there’s something very motivating about seeing the cashier count your bags at the end of the transaction, punch it into the register, and add a line-item to the end of the receipt, even if it’s only for twenty cents of whatever.  It makes you kick yourself for not bringing your own bags every time it happens.

      1. It is a tax. If it weren’t, we should get a refund (partial at least) when we bring in a bag.  One also expects that the revenue would allow one, upon seeing a bag stuck in a tree, to call a “bag hotline” after which a crew would be dispatched to retrieve said bag for proper disposal (IF pollution control is the point of collecting the fee).

        So, yeah, I’m bitter, I’ve forgotten my bag up in Montgomery Co. a few times.

  4. I order my drinks “for here,” and it comes in a ceramic cup. Nobody seems to realize that this is an option. If they would ask, “for here or to go,” they’d be using much less paper.

  5. I order my drinks “for here,” and it comes in a ceramic cup. Nobody seems to realize that this is an option. If they would ask, “for here or to go,” they’d be using much less paper.

    1. Amen. Though I wouldn’t be caught dead in a Starbucks, I make it a point to get my drinks “for here” regardless of where “here” is. Days where I can’t afford the time to sit down, I usually bring my crack coffee from home. The real deal in getting coffee at a coffee shop is renting the wifi, seat, and table for half an hour. The coffee is a perk.

  6. when you pay 5 bucks for a cup of coffee i don’t think a dime is going to make a difference either way.

    1.  There isn’t a $5 cup of coffee at Starbucks.  There might be some BS sugar drink that gets close, but a cup of actual coffee is cheaper than almost anywhere else at $1.50 or so.

    2. Exactly – the biggest penalty for drinking a cup of Starbucks coffee is the fact that you have to drink a cup of Starbucks coffee. 
      Make your own and save $4, and a few hundred calories…

  7. Am I misunderstanding, or are the two exactly the same thing?  The only difference would be “Drink: $4.00 (minus 0.10 if you bring your own mug)” versus “Drink: $3.90 (plus 0.10 if you don’t bring your own mug)”

    I suppose that there may be a psychological difference.

    1.  The point of his argument is that people behave differently depending on how it is presented to them:  “People tend to work harder to avoid losses (the 10-cent charge for a paper cup) than they do to pursue gains (the 10 cent discount for bringing your mug).”

  8. Here in New Zealand several retailers began charging 10c per plastic bag for bagging purchases. The supermarket I shop gave this up after a few months due to customers complaining. Their acquiescence annoyed me, but then I’m one of the few customers who brings my own reusable bags. There are still a few retailers who charge for bags, and bag use has reduced considerably as a result. People are much happier to carry items in their arms to their cars when they’d have to pay for a bag.

  9. No offense, but isn’t that what they’re doing right now? They’re calling it an incentive, but if you called it a fee, the net would be the same. You pay more if you get a paper cup than if you bring your own.

  10. Here’s your problem right here: “Some customers also might misinterpret a 10-cent charge for cup as a price increase, even if the coffee price dropped at the same time.”

    Starbucks doesn’t need an incentive to get rid of the cups. Are you kidding me? Don’t tell me they want to keep the cups, they are the ones who have to pay for trash service, including the amount they pay their own employees to deal with trash.

    The problem is this would hurt coffee sales overall, because customers would be angry.

  11. I have seen resource use conversion rate estimates ranging from 500+ to over 10K to 1 for a ceramic or steel vs a paper cup.   Using a paper cup is often the better alternative for people who drink infrequently, or have difficulty hanging on to a ceramic mug for a long time, etc.  Especially if you are relatively consistent about washing & recycling your paper cups.    At the high end of the estimates, you are talking 1-2 stainless steel mugs for your lifetime, any more than that & you are better off with paper.  We *see* the paper cup go in the trash.  What we don’t see is the mountain of debris that goes into mining & refining ore, etc.

    1. Metal is easy to recycle, though, unless it’s spread very thin, like in electronics. 

    2. I’ve been carrying a mug for years. Over time it went from just another cup to my only cup. Since then, I haven’t broke a glass. When the mug is too worn, I smash it and recycle the bits. The amount of steel in my mug is about the same as goes into 2 or 3 cans of food (which along with other disposable conviences, I’ve [mostly] stopped buying).

      Of the people you know who regularly drink coffe, how many regularly wash and then recycles their paper cups? Everyone I know throw them in the trash.

  12. I know this is going to be a popular opinion but I want frozen drinks in a styrofoam cup.  Alright, iced coffee can go in that clear plastic they use, but frappes and milkshakes – foam cup.  It is so much nicer getting a milkshake in a foam cup where I can take my time enjoying it instead of having it turn into liquid faux milk product in less than 15 minutes.

      1. I bought some espresso cups from Ikea like that a couple years ago, except they’re glass. They’re pretty cool. 

        Ikea recalled them essentially because they can break (I mean, it’s glass… thinner glass than normal, but still…) so I wouldn’t be surprised if it’s hard to find glass ones (just like Thermoses). Mine don’t get used that much but they’ve held up fine.

        But I just don’t find drinking out of plastic cups, no matter how nicely made, to be very pleasing compared to any of the alternatives.

      2. @niktemadur:disqus: They actually sell double-walled cups like that in Starbucks stores, so you can probably also get them there if you have a location near you. Bonus: the Starbucks version come with a lid and reusable straw. (Also available online).

  13. The coffee giant knocks ten cents off beverage price for customers who bring in their own mugs.

    Forgive me if I’m not impressed, the locally owned coffee shop I go to discounts 10% for the same gesture.

  14. There’s an obvious psychological aspect – bringing your own travel mug or whatever makes it seem like you made your own coffee at home (which if you know how is probably better than Starbucks, but realistically most people don’t know how), or in any case it doesn’t feel like you just paid $4 for it. And of course, part of the “Starbucks Experience” is letting everyone else know you just went to Starbucks.

    1. You omitted “…and then letting the person on the other end of your phone call know that you’re late for yoga.”  (Which, of course, is the point of going to yoga.)

    2. “Starbucks Experience” is letting everyone else know you just went to Starbucks.

      And having someone else tell you that Indie Place/dunkin Donuts*/Tim Horton’s (oop north) is so much better, to which you have an option of starting an argument.

      *for ‘blue collar’ marketing Dunkin Donuts coffee is just as pricy as Starbucks.

  15. I hope that was a joke. I hope this Mark Gunther realizes they already are charging people that dont bring their own cup 10 cents more.

  16. A whole dime? Really? An entire ten cents?
    This would be applied to the same customers who think nothing of paying $4+ for a coffee beverage, right? The same ones who just pay for their drink on their smartphone’s Starbuck’s app, so they never really know where that dime went?

    Think the customer could spare the dime?

    If they charged an extra dollar, and made it obvious that this was happening during the transaction (“OK, that’s going to be $4 for the drink, and $1 for the paper cup”), it might work.  But the common Starbuck’s customer will scoff at a mere dime being added to their tab — they’ll leave 10 times that in a tip (as evidenced by the dollar bills in the tip jar at every location I’ve been to.)

  17. So that means somebody’s drinking 24 cups of that shit cause I won’t touch it.

    I prefer coffee.

  18. A more important question is: “Does reducing paper usage save trees”?
    Last I checked, paper companies plant more trees than any other organization/industry. If demand for paper goes down, wont they plant fewer trees?
    From The United States Forest Service prepares a report every 10 years on tree planting, timber stand improvement, and nursery production activities across all ownerships of forest land in the United States. …Question: Who plants the most acreage in trees each year?Answer: Forest industry plants 45%, non-industrial private owners plant 42%, the National Forest System plants 6%, other government and industries plant 7%.

    1.  Don’t they plant trees to replace the ones they have cut down?  I know that’s the rule up here in Canada – they have 7 years to get the trees replaced and up to a particular density or they face some sanctions.

      It isn’t like they are out there planting trees because it’s Arbor day or something.  It is not an altruistic gesture.  Presumably if demand for paper went down, they would cut down fewer trees (and consequently plant fewer as well).

  19. As many commenters have pointed out, ten cents is insignificant to people who will pay $4 for a cup of so-so coffee. 
    I propose they drop the cup charge/discount, and instead they dope-slap each paper-cup customer just prior to handing them their coffee (sort of like the Robin Hood distribution line in Time Bandits).  That would help customers to remember to bring their own cups next time.

  20. Few here seem to understand what the “behavioral” part of “behavioral economics” means.  This is about changing behavior by re-framing the incentive to re-use from a making a gain to avoiding a loss.  Despite what we like to think about ourselves, we are not truly rational.  We are more motivated to avoid losses than to pursue gains.  see

  21. Eh, I’m less worried about Starbucks as a corporate waste entity. Paper is definitely better than plastic. It’s biodegradable and recyclable, and for the most part paper products are taken from tree farms these days so the more we buy the more trees will be planted and clean the air. I’m down with that. Also, Starbucks gives bennies to part-time employees and supports gay marriage, so I think we shouldn’t nitpick at them for this.

    1.  I’d really support them if they used hemp paper.

      (I almost typed ham paper and now I can’t stop giggling)

  22. Regardless of how it’s framed, 10 cents seems a small incentive.  In my town most of the coffee shops offer 25 to 35 cents off for bringing your own cup.  But one set of shops has just made a radical shift:  50 cents off if you bring your cup, 50 cents extra if you don’t — so no matter what, nobody is paying the price listed above the counter.

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