Starbucks: Square Is There

Coffeehouses now selling card reader to help small-business customers who frequent chain

SEATTLE -- All 7,000 Starbucks coffeehouses in the United States began selling Square's mobile credit-card reader for $10 on Thursday, reported The New York Times. People new to Square can sign up and get a $10 rebate, it said.

Square's card reader is a small white plastic square that pops into the headphone jack of an iPhone, iPad or Android device. It works with Square's app to allow anyone, like a dog walker, babysitter or farmer's market merchant, to accept credit-card payments. Square takes 2.75% of each transaction.

Linda Mills, a Starbucks spokesperson, told the newspaper that selling the reader was another step to show the company's commitment to Square. In August, the company said every American Starbucks cafe would accept payments from Square's payment app, Square Wallet. Starbucks also invested $25 million in the startup, and Howard D. Schultz, Starbucks' chief executive, joined Square's board.

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Mills said that Starbucks was aware that many people from small businesses come through Starbucks cafes and often do their work there, so offering the reader in its cafes was a good fit.

In other Starbucks news, the Seattle-based coffee giant and actor Patrick Dempsey were among those vying to become the new owners of Tully's Coffee, also based in Seattle.

Starbucks confirmed for the Associated Press that it participated in a bankruptcy auction Thursday to buy Tully's Coffee, which has 47 company-owned locations in Washington and California. Tully's filed for Chapter 11 bankruptcy protection in October.

Dempsey, who gained the nickname "McDreamy" on the TV show Grey's Anatomy, said last week that he wants to rescue the chain. Also in the running is Baristas Coffee, which operates a chain of drive-thru espresso stands featuring female employees in skimpy outfits, said AP.

A representative for Starbucks declined to provide details of the company's bid, citing the court's confidentiality orders. But last week, The Seattle Times reported that Starbucks only wants to buy about half of Tully's chains.