Starbucks changes rewards program; small spenders lose
ASSOCIATED PRESS
In this Jan. 11 photo, a man sits inside a Starbucks, in New York. Starbucks is changing the terms of its rewards program so that people who just get a regular cup of coffee will have to spend significantly more to earn a freebie.
NEW YORK » Starbucks is changing the terms of its rewards program so that people who spend around $5 or less per visit won’t get as many freebies.
The Seattle-based coffee chain says its loyalty program will award stars based on the dollars spent starting in April. Currently, people earn a star for each transaction, regardless of how much they spend, and get a free food or item of their choice after earning 12 stars.
People will now have to earn 125 stars for a free item, with each dollar spent being worth two stars — meaning they have to spend $62.50 to get their free item. That means people who stick with options like plain coffee are losing out.
For instance, someone who regularly pays $2 for a regular drip coffee would currently earn a free item after spending around $24 over 12 visits. Under the new system, they would have to visit more than 31 times before they earn the perk.
Someone who gets a large latte for $4.45 currently spends around $53.40 over a dozen visits before getting a free item. That person would need to visit a couple extra times for the freebie with the new system.
Still, Starbucks says the change is the No. 1 request among loyalty program members and predicts it will lead to higher spending by customers eager to earn more stars.
In a call with analysts, Starbucks Chief Strategy Officer Matthew Ryan said the vast majority of customers will earn rewards at an equal or better rate with the change. Without providing details, he said a “small minority” of customers will earn rewards at a slower pace.
The change is not an opportunity to opaquely reduce the value of the program, Ryan said.
The current rewards system can also increase waiting times in store lines, Ryan said, because some people try to get additional stars by asking to ring up multiple items separately. Such instances account for 1 percent of all transactions, he said.
The change comes as Starbucks has been pushing to get more people signed up for its My Starbucks Rewards program. Loyalty members spend three times as much as non-members, and help push up profit, according to the company.
Last month, Starbucks said it had 11.1 million loyalty program members in the U.S., up 23 percent from the previous year.
The coming change will not benefit customers such as Vincent Fiorese, who works in construction management and spends less than $3 on a cup of coffee whenever he goes to work. But Fiorese said it wouldn’t deter him from getting his coffee.
“It sucks, but what am I going to do,” he said.
Shares of Starbucks Corp. hit a two-week high in midday trading.
19 responses to “Starbucks changes rewards program; small spenders lose”
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Too much paperwork in those small transactions. For the same amount of calories expended in the paperwork , might as well focus on the big spenders.
Working real hard to maintain that loyalty, eh? Probably not going to try so hard to maintain gold anymore. My dollars are probably better spent supporting a local shop anyway.
yup – starbucks don’t need my business – I go to the local places…
Starbucks is not loyal to their customers – good time to go local!!
Agree! Dang, and I just put down $40 on my account. Oh well. Exhaust this $40 and hit up the local guy across the street.
Not sure why anyone is grumbling. If you don’t like it, don’t patronize them. I really don’t know what the attraction to this place is anyway. To spend that much for a cup of coffee, or even worse to be getting a daily dose of fat and sugar (and pay even more), seems ridiculous. But then again, its just my opinion.
@Iwandcah Everybody has their vices. Some smoke, some drink, some pay to watch internet porn. You can go through any store and say “why would anyone buy that?”. The only true answer is “because they can”.
The “little guy” loses, again.
How sad! A lot of people just want cup of coffee and a place to relax. Loyalty means nothing, as usual its all about the money!
Try McD. Great coffee, good folks.
What a waste of money, make your own coffee
Exactly. Starbucks espresso and cappuccino tastes like dishwater. I get my espresso-roast beans mailed from Peets, grind them in a Breville burr grinder, use filtered water in my Italian espresso machine, and steam the milk for each cup. It’s actually quicker than going to Starbucks and the resulting product is so much better that you’d never touch their swill again.
“Starbucks says the change is the No. 1 request among loyalty program members.” Yeah right! Who did they poll? Must be a bunch of idiots who can’t add.
Way to go Starbucks. Just can’t make enough money you have to be greedy.
Not to worry. More customers will drop you and go to McDonalds, Dunkin Donuts, other coffee sources for their daily fix at lower cost and better treatment.
Sad day when Starbucks decides to follow the greedy airlines to nickle and dime their customers to death. Suddenly buying a container of ground coffee and making your own sounds a whole lot more financially efficient.
I miss Dunkin Donuts. If you visit Boston, they outnumber Starbucks 2-1.
what there’s a Dunkin Donuts in Hawaii? You gota tells us where it’s at bro!
Just when you thought elitist coffee couldn’t get more elitist.
No loss. I have never been offered a Starbucks’ awards card. But I do have one for The Coffee Bean and Tea Leaf.
Give me a break people. How many people would still be buying Starbucks if there were no awards program? It cost nothing to join, except personal meta data, and once and awhile you get a free drink, discount price on drinks, free refills on coffee/tea, etc. If you want to protest, start drinking McDonald McCafe.