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SEATTLE — Starbucks Corp. is changing the terms of its loyalty program to be based on dollars spent, rather than the number of transactions made. As a result, customers who buy more expensive drinks will receive greater rewards, while those who make smaller purchases will take longer to earn the same freebies.
The current program awards customers one star for each transaction, regardless of total cost. Program participants receive a free food or drink item after accumulating 12 stars.
Starting in April, Starbucks Rewards members will earn two stars for every $1 spent and receive a free item at 125 stars. Change, such as the 20 cents of a $6.20 purchase, will go toward partial stars.
This loyalty program change applies to Starbucks locations in the United States, Canada and Puerto Rico.
Starbucks is also abolishing the entry-level Welcome tier of the program and upgrading all members to at least Green Level. Free birthday drinks or treats, free in-store refills on brewed coffee or tea, and other amenities will be available through Green Level.
Customers who earn 300 stars in a 12-month period will attain Gold Level, which entitles them to all Green benefits, as well as a free food or drink item every time they redeem 125 stars for a reward; monthly double-star days; and a personalized Gold Card.
This change reflects the No. 1 request made among Starbucks' loyalty program members and will likely lead to higher spending by customers who want to earn more stars, according to the company. Members currently spend around three times as much as non-members.
Starbucks Chief Strategy Officer Matthew Ryan stated in a call with analysts that the vast majority of customers will earn rewards at an equal or better rate than they did previously, and only a small minority will earn rewards at a slower pace, reported the Associated Press.
Ryan also noted that one problem with the current program is it can slow down lines as a small number of customers seek to earn additional stars by paying for multiple items in separate transactions.
As of January, Starbucks said it had 11.1 million loyalty program members in the U.S., jumping 23 percent from the previous year.