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badice.com ~ travel musings for the masses

I am probably not the customer Starbucks wants using their rewards program. When I am in a city where there are not a lot of local coffee options, Starbucks is my backup. The blonde roast is drinkable and if it is not being brewed they are happy to make a pour-over of it. All of this to say, a lot of my recent work travel has not been close to local coffee shops, but Starbucks were readily available.

The recently announced changes to Starbuck’s rewards program are not going over well.

Under the new plan, the “stars” that are stockpiled to earn free drinks and other rewards are awarded at a rate of two stars for every $1 spent. Currently, customers earn one star per visit. But it will take 300 stars to get to the company’s Gold status, up from 30 stars, and it will take 125 stars for a reward, instead of 12.

Stars will now be earned based on spend instead of number of transactions, meaning people who buy the expensive Frappuccinos will earn more stars than someone like me who orders a grande coffee. I am sure this is specifically targeted at a customer like me who earns 12 stars by ordering coffees and then redeems (or has someone else redeem) an expensive drink. Or worse, the person who orders a coffee and a pastry but in separate transactions to earn two stars and then redeems for something expensive.

Are the Starbucks changes aggressive? Yes, but just like in the airline mileage earning and redemption world you have to remember: Pigs get fat and hogs get slaughtered. Starbucks could have probably made some rules changes that simply limited the number of transactions per day to something reasonable (2 per day maybe?) but they decided to go fully revenue based. The revenue based rewards are quickly becoming commonplace across tons of different industries as a way to “reward” someone for their spend rather than their loyalty. The thing to remember is that spending more to earn a reward usually is not beneficial to you mathematically. Well, unless you’re buying the office coffee on a corporate card; Then you’re making out like a bandit.

In the end, this probably will not change my habits when it comes to Starbucks. If there is no local option when I travel, I will visit Starbucks. And that’s probably exactly what Starbucks wants. Spending habits stay the same but the number of rewards will decrease.

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  1. February 23, 2016

    Fortune did a decent write-up on this yesterday (http://fortune.com/2016/02/22/starbucks-loyalty/) and it’s basically because of the 1 star per coffee stipulation, people would ask to split orders into individual items to get a star for each.

    I’m still not sure how I feel on the whole situation. Looking at coffee only it’s going to cost me about 150% of what I’d spend on coffee just to hit a reward and about 250% of what I had to spend to maintain gold. The flip side of that is that I now also get stars for other items like breakfast sandwiches I’d occasionally buy but never get credit for.

    I have a feeling it’ll be close to a wash on reward items but still need to spend more (or make use of bonus offers) to boost chances of maintaining gold status year to year.

    • Stephan Segraves #
      February 23, 2016

      Thanks for the link, I had completely missed Fortune’s write-up.

      You are correct, it’s more than likely a wash. For me, it was pretty easy to get 12 stars rather quickly, two visits a day/one cup of coffee each visit. In the end, it won’t change my habits. When I am somewhere that doesn’t have a good local option, I will be going to Starbucks and that’s exactly what Starbucks is counting on.

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