The Cutover for Starbucks Rewards New Revenue-Based Program is Tuesday

Back in February I detailed Starbucks plans to gut their rewards program for many customers. As is the trend in the airline loyalty game, Starbucks is moving to a revenue-based program. High-spenders will mostly break even. Folks who just buy a cup of coffee will see their rewards slashed drastically.

Starbucks is informing members that the IT work for the changeover starts tomorrow, with new earning going into effect on Tuesday.

On Monday, April 11, we’ll be making updates to the Starbucks® app and website. During the day, you might notice certain parts of the app and site may not appear to work properly.

…Don’t worry if there are some delays, or certain things (like your Star count) seem incorrect. We’re keeping track of everything and all your correct information will be available again on Tuesday.

Here’s what’s changing:

  • The ‘Welcome’ level goes away. Everyone starts at Green, so no waiting for 5 stars before earning free in-store refills for coffee and tea.

  • There will be ‘double Star days’ for Gold members each month.

  • Existing star balances in your account will be multiplied so you don’t lose out with the new inflated currency.

Here’s the comparison of earning and redemption between the current and new systems:

Break-even for status-earning in the new program is an average of $5 per Starbucks transaction. If you spend more than $5 per Star you earn now, you’ll earn status faster. If you spend less than $5 you’ll take more transactions to earn status.

The Starbucks Rewards program, like so many others, has developed a history of devaluation. Now they’re inflating their currency, going revenue based, and even shaving free drinks ever so slightly. And they claim in their brochure this is the number one requested change by members. That’s like saying it’s an enhancement.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Quick question: I need 5 more stars to earn gold under the old system (30 stars) , and 7 stars for a free drink (12 stars). Should we (meaning all of us in general) be accelerating purchases the next 2 days?

  2. FWIW I was in SBUX today and talked to a manager and there is actually some GOOD news on this front..
    1. All active and new members will be moved to “Green” status once the program is live
    2. If you are like me and still a bit away from Gold once the program changes, no worries…Just make a purchase on your registered card or app from 4/11-5/1 and you get UPGRADED TO GOLD AUTOMATICALLY
    3. If you already are Gold, make a purchase in the same period as above and you get Gold extended for a year!

    so while it does suck with the changes, they at least are offering a quick path for regulars who do not want to think about how to do the math before and after the cutover.

    back to lurking….

  3. Mary, the answer is probably, yes. Make sure you have them ring up purchases individually- if you buy a coffee and pastry, have them ring them up as two purchases.

    Thanks for the analysis, Gary. Starbucks isn’t my favorite coffee shop but I do go there somewhat frequently. They also occasionally run short-term specials such as make 10 purchases in 14 days that can also increase the value of the redemption stars.

  4. I’m guessing the real reason for the now Starbuck free refills is that McDonalds coffee (at half the price) beat Starbucks on the blind taste tests and give free refills.

  5. +1 Michael – My visits dropped off when Starbucks replaced their baked good with the awful La Boulange products.

    Gary what is your basis for concluding that the conversion of existing star balances will be handled fairly? If SBUX was smart it would just zero out the balance and award a free drink to everyone (generate goodwill and more business), but I doubt they will be that generous.

  6. the new reward system is anything but that. it used to be that 12 “stars” could be earned with as little as the purchase of 12 cups of coffee (ranging from about $1.75-2.25), whose prices alone have recently risen about 10%. so a reward could cost about 12 * $2 or $24. But now to earn a reward, one must get 120 “stars” at a cost of $120 — or “just” $60 for gold members. To sum up, prices have risen 10% while a reward requires some of us to spend 300% more. Time to buy SBUX stock?
    (note that leaving out the middle letters, you get S—-UCKS!)

  7. i had 11 stars (1 shy of the 12 required for an award), and was informed that i now needed 109 more to earn that same reward. customer service was kind enough to provide the free drink.
    the lesson learned for any business should be that once you give something to a loyal customer, and then take it away or reduce it, the loyalty will drop considerably – or even disappear.

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