"Free" Starbucks Cards Cost Teachers Dearly

The Starbucks Gambit - how one predatory sales agent plans to turn $50,000 in Starbucks Gifts Cards into $100 million

It’s long past time to ban 403(b) salespeople from public school campuses. The industry has proven time and again that it cannot act in an appropriate manner when attempting to conduct business.

Teachers and other school employees are under assault. I’m not being hyperbolic, teachers are targeted by companies that sell high commission, low-quality financial products because they are seen as easy prey. School districts that don’t have solicitation guidelines or who don’t enforce them are complicit.

It’s time to ban financial salespeople from all public school locations at all times unless they are part of a program specifically designed to protect teachers from predators.

With the prospect of the pandemic coming to a close, at least in the United States, and the expectation that most schools will be open in the fall of 2021 in full, it’s time to address the return. I’m not talking about the return of students, I’m talking about the return of predatory sales agents. For too long 403(b) sales agents have had too much campus access, it’s time to change this forever.

Recently I was watching a YouTube video from a company that markets exclusively to teachers. The speaker was teaching his insurance agent salesforce how to sell and get referrals from teachers. The preferred method? Starbucks gift cards. You can find the video here. It seems the company took the video off YouTube, no worries, I have a copy, please contact me if you want to view.

Here are the steps:

1. Buy leads generated via spam e-mails or use an existing relationship to get an on-campus appointment with one teacher (pre-COVID).

2. Once the agent has met with the prospect, they tell them that their boss requires that they not leave the campus without first handing out five $5 Starbucks gift cards. The agent gives the prospect one of the gift cards and hopes to get introduced to four other teachers whom they can hand a Starbucks card in exchange for the hope to schedule an appointment with them. (Start at the 11:50 minute mark)

3. The agent meets with the teachers and tries to sell them high commission indexed annuities and indexed universal life products.

The agent doesn’t need to convince all five prospects, only one or two and they then repeat the process of asking who else they can hand these Starbucks cards to.

If you think this sounds like a strategy that wouldn’t work, you’d evidently be wrong. The speaker announced on the video that he had “invested” (he showed a picture of a box) $50,000 in $5 increment Starbucks gift cards for his agents to give out and he then declared that he would turn that $50,000 into $100 million in commissions by the end of the year (see minute mark starting at 15:10 and going through minute 16:30). If you’re wondering, that’s a 2,000x return on investment. Each $5 gift card is expected to result in $10,000 in commission. Think about that statement.

The public school campus is being turned into a game to enrich insurance agents. Our teachers aren’t being put in high-quality, fiduciary-based products by these agents, they are being put into products that qualify the agent for trips to exotic locales and pay large commissions. There isn’t much leftover for the teacher. Agents on school campuses aren’t a service, they’re a tax and a heavy one.

If you think these agents are on campus to help everyone, you’d be wrong. At minute mark 17:00 we find a stunning admission:

“I’m sorry. Only 10% of the people in there have any discretionary income. What you’re gonna end up doing in there is 78 pension reviews. At a half hour each, that’s 39 hours. How bout you get 10 appointments…send the other 79 to the TRS or CalPERS website and when they got money, they can do it later. I’m totally against meeting with every single person. I think it’s the biggest waste of time ever. Unless I need the access, then I’ll do a few. I’m all about finding out if they got anything to work with right at the beginning. I love to help people and do all that, but I can send them to the website and help somebody else while I’ll have time to work with somebody else that has money. Some of us are in the non-profit business here, I’m not.

Giving campus access to insurance agents isn’t increasing participation, it isn’t helping those who need the most help, it’s just enriching and lining the pockets of the insurance agent.

Giving access can actually be detrimental to both the school and the students. These agents aren’t just looking to sell to district employees, they are looking to recruit them. Jump to minute mark 37:00 where the speaker talks about recruiting teachers off the campus visits. He makes the remark “We don’t want them quitting in the middle of the school year. That’s the only thing that would bother the (school) district. They don’t have any problem with us recruiting their people. They do have a problem with them quitting and nobody to fill them…”. This company literally thinks it’s ok to recruit off campus visits and doesn’t think the school district will mind. There is no good reason to allow these people access to your schools.

The Starbucks gambit isn’t the only nefarious strategy. Sponsoring cheap bicycles as a reading award for a student in order to gain access and credibility is a popular one.

Sponsoring “Teacher of the Year” awards in order to get good publicity for the agent’s company (it’s not about the teacher, they are a pawn). Teachers don’t realize it’s their own money financing these faux awards. Many companies will even sponsor projects at a school campus in order to attract media attention and to gain access to the employees. This isn’t altruism, it’s a trojan horse.

Participation rates in public schools haven’t budged in decades, clearly, the current system isn’t working. It’s time to make changes, the first one is to get rid of allowing conflicted salespeople any access to public schools, and giving them access via Zoom is NOT a solution.

The salesperson lunches and breakfasts should be shown the door, they aren’t needed. They are the most expensive meals a teacher will ever eat.

These salespeople do not add value and aren’t interested in working with everybody. Are these the kind of people we want helping our teachers? The person doing the speaking in the YouTube video was one of the top salespeople for National Life Group, a company that specializes in selling to educators. National Life Group has given this person accolades and awards.

There is literally no reason a financial product salesperson should ever be on a school’s campus, none. It’s a professional work environment for one (Apple computer doesn’t allow random people in their headquarters to go office to office) and two, it represents a security threat to the children on that campus. There is a better way.

If you’re interested in the full video, here it is: