Starbuck’s customer rewards program is being revamped.
Under the current “My Starbucks Rewards” program, customers earn one gold star per transaction regardless to what they purchase. A $20 visit gets the same reward as a $5 visit.
Now, with the new “Starbucks Rewards” program, customers earn 2 gold stars for every $1 they spend. The stars are redeemable at any location and can be exchanged for any Starbuck’s menu item.
According to Starbuck’s Chief Financial Officer, Scott Maw, this change was “the number one customer requested — more stars awarded based on what customers buy at Starbucks no matter how often they visit. That means giving stars for every dollar spent on everything — coffee, mugs, drinks, food and more.”
The change was also prompted by complaints concerning the “My Starbucks Rewards” members who sought to maximize the one star per transaction system. These customers would split their purchases into multiple transactions to earn more stars.
“That is challenging for customers who are forced to wait, and to our baristas who have to perform extra work,” said Starbuck’s chief strategy officer Matthew Ryan said.
Ryan went on to explain that extended transaction times not only causes delays and annoys other patrons, it also adds additional costs for the store. He estimated that 1 percent of the total transactions come from customers dividing their purchases 2 or 3 times just for the additional stars. Starbucks makes the same amount of money on the purchases but expends more time and energy.
“This new program will remove this distraction from our store operations,” Ryan said.
The original rewards program was launched in 2009 and is one of the nation’s most successful loyalty programs among restaurants and retail shops. The program currently boasts 11 million active members.
The new rewards program is aimed at attracting even more customers into joining and company executives believe the new structure should drive up sales.
However, the new system has received some backlash.
While based on the amount of money you spend, the new loyalty program requires more stars to receive the freebies. Under the old system, it took 12 stars (12 transactions) with no dollar requirement, to receive a free coffee. The new system requires 125 stars.
This means you are required to spend $62.50 before earning that free cup of java. For the more frugal coffee drinkers, that can be as many as 21 trips to Starbucks.
Some Patrons believe that the new system punishes the more prudent coffee drinkers. Disgruntled customers took to social media and expressed their displeasure:
Starbucks new rewards program poorly thought out. I’m switching!
— geoffry hirose (@geoffryhirose1) February 23, 2016
When @Starbucks says “It was the #1 Customer Request!” all I read is “It was the #1 Shareholder Request!” #done #rewardsprogram
— Megan (@mpreecephoto) February 23, 2016
In the end, the new rewards system is designed to drive up sales and entice customers to spend more money.
Love it or hate it, it is here to stay.