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Coinstar Redefines Coin Counting Industry Through Innovative Gift Card Program; Successful Coin to Card test with the Starbucks Card leads to program rollout


WEBWIRE

BELLEVUE, WA -- February 3, 2005 -- Coinstar, Inc. (Nasdaq:CSTR), the leader in self-service coin counting, today announced the initial set of gift cards for its new Coin to Card(TM) program, which allows consumers to convert loose change into gift cards from national retailers and supermarkets. The new offering, rolling out to selected Coinstar kiosks beginning this spring, helps further drive consumer traffic to Coinstar’s retail customers and card issuers, while providing a no-fee coin counting option to the end user.

The Coin to Card model was first tested with Starbucks Coffee Company and the Starbucks Card in Seattle, Las Vegas and Philadelphia. Based on early results, this new service, which will continue to include the Starbucks Card, will be expanded and rolled out to the Coinstar network on a regional basis beginning this spring and is expected to be fully implemented across the country within the next two to three years.

Hollywood Video will also be among the first set of gift cards to be added to the Coinstar kiosk. Coinstar is looking to add additional retail gift cards in the future, which will include cards in categories such as books, movies, apparel, restaurants and home improvement.

The Coinstar kiosk, typically located at the front end of supermarkets, will provide users with the ability to choose from up to three retail gift cards or a branded gift card from the participating supermarkets.

“We are thrilled to be introducing this innovative program and are proud to offer gift cards from some of the country’s finest retailers,” said Rich Stillman, president of Coinstar, Inc. “It’s a great program for our retail and card partners as well as consumers. This new service, featuring no-fee coin counting, gives consumers a compelling reason to convert the estimated $10 billion in idle change sitting dormant in American households into something of real value.”

“We are very pleased with the results of the test program with Coinstar and look forward to being part of their rollout,” said Sandra Stark, director, Starbucks Global Card Services. “We like the idea that customers can enjoy a small indulgence by turning their forgotten change into a Starbucks Card.”

An estimated 80 percent of Americans accumulate coin, but only 58 percent of them choose to cash in their coin. The ability to turn this inactive change into a latte, DVD rental, accessories for the home or even groceries with no coin counting fee, gives consumers a choice and a motivating reason to cash in change. In addition, Coinstar’s new coin-counting model allows the company to tap into the burgeoning gift card market which, according to the Pelorus Group, is expected to grow to $132 billion in 2008 from $79 billion in 2004(1).

About Coinstar, Inc.

Coinstar, Inc. (Nasdaq:CSTR) is a multi-national company offering a range of products and services consisting of coin counting, electronic payment solutions and entertainment services at retail locations including supermarkets, drug stores, mass merchants, convenience stores, and restaurants. Coinstar’s e-payment business is operated through its wholly owned subsidiaries CellCards of Illinois, L.L.C. and Coinstar E-Payment Services, Inc. For more information, visit www.coinstar.com.

This press release contains forward-looking statements relating to Coinstar, Inc.’s anticipated growth and future operating results. These are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “intend,” “anticipate,” “goals,” variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements are not guarantees of future performance and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by Coinstar, Inc., as well as from risks and uncertainties beyond Coinstar, Inc.’s control. Factors that could cause or contribute to such differences include, but are not limited to, Coinstar, Inc.’s ability to (a) enter into additional card partner agreements on terms that are not materially adverse to Coinstar, Inc., (b) bring new and repeat customers to Coinstar(R) machines, (c) obtain new agreements with potential retailers for the installation of Coinstar machines or retain current agreements with our existing retailers on terms that are not materially adverse to Coinstar, Inc., (d) compete with additional potential competitors, (e) anticipate legal or governmental regulatory action and uncertainties relating to the ultimate success of new business initiatives such as Coin to Card or e-payment services. The foregoing list of risks and uncertainties is illustrative, but by no means exhaustive. For more information on factors that may affect future performance, please review the most recent Coinstar, Inc. reports filed with the Securities and Exchange Commission. These forward-looking statements reflect Coinstar, Inc.’s expectations as of February 3, 2005. Coinstar, Inc. undertakes no obligation to update the information provided herein.

(1) The Pelorus Group, “Stored Value: Transforming the Payment Industry,” July 2004. Market estimates include both retailer and bank gift cards.



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