Starbucks Corp tightens rewards program rules: ‘The more you spend, the more you get back’

LOS ANGELES – Starbucks Corp on Monday announced changes to the loyalty program that will mean some customers will need to spend more money in the coffee chain to earn free drinks and food.

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Under Starbucks’ current rewards program, customers earn redeemable points for every purchase. The new program will award points for each dollar spent, a big change that is sure to spark complaints from customers who’re accustomed to accumulating points with frequent purchases of drip coffee along with other lower-cost items in the Seattle-based chain.

The widely anticipated change to the Starbucks Rewards program in the United States, Canada and Puerto Rico may come as airlines and other companies have been tweaking their rewards programs to ensure they are generally less-generous to consumers.

Starbucks customers now earn one “star” per purchase and may redeem 12 stars for any free food and drink item. From mid-April, customers will get two stars for every $1 spent but need 125 stars to get a free item.

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Matthew Ryan, Starbucks global chief strategy officer, said the change wasn’t a way to weaken Starbucks’ rewards program. The vast majority of Starbucks customers will earns rewards at the same pace they do today and the total percentage of revenue that Starbucks will give you as rewards will stay constant, Ryan said.

However, he acknowledged the change will affect a little minority from the a lot more than 11 million active users of Starbucks’ reward program.

About 1 percent of the chain’s total transactions now originate from “cheque-splitters,” customers who request two or more transactions in one trip to earn stars faster, Ryan said.

While the modification could mean that some Starbucks customers get less for his or her stars than previously, it will benefit those who spend the most, said Patrick Surry, chief data scientist at Hopper, who has analyzed airmiles programs.

“It aligns the incentives therefore the more you spend, the more you get back,” Surry said.

?  Thomson Reuters 2016