Starbucks Secrets You Didn’t Know About

Ever wondered why baristas always ask if you want a medium or large—never a small? Or why your "medium" coffee costs just 3 yuan more than the "small," nudging you toward a bigger size you didn’t plan to buy? These aren’t accidents. They’re carefully crafted strategies based on human psychology and clever marketing tactics that have quietly shaped how you order coffee.

In short: Starbucks and Costa use pricing tricks, hidden upsells, and loyalty cards to push you toward higher spends and repeat visits. Their “free coffee” promotions, tiered rewards, and confusing cup labels all serve one goal—boosting profits while making you feel like you’re getting a deal.

The Costa Strategy That Forced Starbucks’ Hand

Once upon a time, Starbucks noticed its sales slipping while Costa’s stayed steady. An investigation revealed Costa had introduced a membership card that offered a “free” coffee with the purchase of an £88 card (about $115), granting customers a one-time free drink (worth £36) and 10% off future purchases. Roughly 70% of customers took the deal.

Here’s the math: Without the card, 100 customers spending £36 each brought in £3,600 in revenue, with a profit of around £3,200 after accounting for a £4 cost per cup. With the card, 30 customers paid £36 and 70 bought the £88 card. Total revenue: (30 × £36) + (70 × £88) = £2,520 + £6,160 = £8,680. Minus £2 per card production cost (70 × £2 = £140), profit hit around £6,700—nearly double, with no increase in customer traffic. Customers felt they were saving money, but they actually prepaid for future purchases they were likely to make anyway.

Beyond the immediate profit bump, the card locked customers in. Since Costa and Starbucks prices are similar, once you’ve got a Costa discount card, you’re less likely to choose Starbucks next time. That’s when Starbucks fought back with its own version: the Starbucks Rewards card.

How Starbucks’ Loyalty Card Really Works

Unlike Costa’s straight discount model, Starbucks’ “Starbucks Rewards” (or ) doesn’t offer discounts. Instead, it gives you perks: a “Buy One Get One Free” voucher (for two drinks, valid three times), a free any-size breakfast beverage (before 11am), and a “free upgrade” to a larger size when you buy a grande. There’s also a gamified loyalty ladder with “Green,” “Gold,” and other tiers based on stars earned per purchase.

Here’s how the star system works: 1 point = 1 yuan spent. Every 50 points = 1 star. Hit 5 stars (250 points, roughly 8 drinks) and you reach “Green” status. Climb higher to “Gold” for even more perks. The system taps into our natural desire to “level up,” making you feel accomplished—and more likely to keep buying.

The real genius? You don’t just feel rewarded. You feel like you’re part of an exclusive club, even though you’re still paying full price for most of your drinks. The invitations to bring friends (“Buy One Get One”) also turn customers into marketers, bringing in new potential buyers.

The Cup Size Trick That Tricks Most Customers

Walk into any Starbucks and look at the menu board. You’ll see three sizes: Tall (medium), Grande (large), and Venti (extra-large). The price difference between each? Just 3 yuan. That tiny gap makes upgrading feel almost free—so most customers opt for the bigger size, even if they don’t need it. In fact, around 90% of customers choose a larger size when the difference is just a few yuan.

But here’s the kicker: there’s actually a fourth size—Short (small)—that’s rarely displayed or mentioned. It’s often tucked away in the drawer under the counter. If you specifically ask for a “small,” they might pull it out, but good luck finding it on the menu. And guess what? The menu doesn’t even show the price for the Short size. It’s hidden by design.

The cup display itself adds to the confusion. When you look at the stand, most people assume the top cup is the “large” (it isn’t—it’s the Venti, or extra-large). The middle cup is labelled “Venti” (which most think is “large”), and the bottom one is “Grande” (labelled as large, but actually medium). The actual “medium” is called “Tall,” but thanks to human tendency to think in hierarchies (small/medium/large), we ignore the actual labels and go with what feels right. The result? You think you’re choosing logically, but you’re actually being guided toward spending more.

This isn’t just clever branding—it’s behavioural economics in action. People overestimate how much they can drink, focus on perceived value (more drink for just 3 yuan more!), and lack a clear sense of what each size truly costs. The result? More waste, higher tabs, and a bigger bottom line for Starbucks.

Frequently Asked Questions

What is the Starbucks Rewards card and how does it work?

The Starbucks Rewards card is a loyalty program that doesn’t offer discounts but instead provides perks like a free drink when you buy two (Buy One Get One), a free breakfast beverage before 11am, and free size upgrades. You earn stars based on how much you spend (1 point = 1 yuan), and after earning 5 stars (250 points, about 8 drinks), you reach Green status with more benefits. It’s designed to make you feel rewarded and encourage repeat purchases without lowering prices.

Why does Starbucks charge only 3 yuan more for larger sizes?

Starbucks keeps the price difference between Tall, Grande, and Venti at just 3 yuan to make upgrading feel like a no-brainer. This small gap leads about 90% of customers to choose a larger size, even if they don’t need it, boosting the average spend per order.

Does Starbucks really hide the smallest cup size?

Yes. Starbucks offers a Short (small) size, but it’s not listed on the menu and is usually kept in a drawer under the counter. The menu only shows Tall (medium), Grande (large), and Venti (extra-large), with no price listed for Short. Most customers never realize a smaller, cheaper option exists.

How does the Costa Coffee membership card strategy work?

Costa’s card offers a “free” £36 coffee with the purchase of an £88 card (about $115), plus 10% off future purchases. Around 70% of customers buy the card. The strategy increases both the initial spend and customer loyalty, locking users into Costa even when Starbucks is nearby.

Why do people tend to choose larger coffee sizes?

People assume that paying just a few yuan more for a larger size is a better deal, even if they can’t finish the drink. The small price gap, combined with a lack of clear size labelling and a natural tendency to avoid feeling like you’re missing out, leads most customers to upgrade without thinking twice.

What’s the psychology behind Starbucks’ cup size labels?

Starbucks labels its cups Tall (medium), Grande (large), and Venti (extra-large), but most customers assume the middle cup is “large” and the top one is “large” too. The actual “medium” is the bottom cup (Tall), but the confusing labels and lack of clear signage make it easy to end up with a bigger drink than intended. This design nudges customers toward higher spending.

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