Starbucks is watering down its rewards program, doubling the number of points needed for free coffee
Similar to almost every other facet of Canadian bills, inflation has come for your morning coffee.
Starbucks is introducing new rules for its loyalty program in the United States and Canada on Monday, changes that could, in some cases, require customers to use twice as many points to get the same items they previously received.
Customers must spend 100 stars — the chain’s version of reward points — on most of their most popular individual items, including a hot coffee or tea, a baked good, or a pre-packaged snack.
Previously, these items only cost 50 stars. How much you get changes, but the way you earn it is the same: a customer earns one star for every dollar they spend on Starbucks items with cash, debit, or credit. Earn two stars for every dollar spent when you pay with a preloaded gift card.
It’s not just about the basics either. More expensive items like frappucinos or hot breakfast items now cost 200 stars instead of 150, and the price of a salad or sandwich increases from 250 to 300 stars.
However, a small number of items will be comparatively cheaper. A 16 ounce bag of packaged coffee that previously cost 400 stars now costs 300, and an iced coffee that used to cost 150 points is now available at the cheapest 100 point tier.
“In order to ensure the long-term sustainability of the Starbucks Rewards program and to meet the evolving needs of our members, we occasionally need to make changes to the program, and while some items may require additional stars to redeem, other popular items such as ice cream may require it Coffee and packaged coffee will require fewer stars to redeem and will be easier for members to reward,” a spokesman for Starbucks Canada said in a statement to CBC News.
It’s not the first time the company has recalibrated its rewards program. The previous big change came in 2016 when the company switched from a system that awarded reward points based on the number of visits to one that distributed them based on the amount of money spent.
In fact, Starbucks isn’t the only coffee chain to have watered down its rewards system recently. In December, Tim Hortons made similar changes to its loyalty program, increasing the price of a coffee from 70 to 400 points. (Timmies shoppers earn 10 points for every dollar they spend on the chain.)
US chain Dunkin’ Donuts introduced similar changes in October.
Patrick Sojka, the founder of Rewards Canada, says loyalty point devaluation is probably the #1 problem for the loyalty point fanatics who make up his company’s customer base.
“It’s huge under the whole points and miles world,” he told CBC News in an interview. “Whether it’s travel like frequent flyer programs, frequent guest programs, or in this case coffee programs [there’s] a lot of negativity around it.”
Sojka said he expects Starbucks to take a hit for essentially halving its reward tiers, but ultimately the chain does what it does because it knows they can.
“In the first few months [customers are] will not be happy,” says Sojka. “But they will go back to their old ways after a few months. We’ve seen it over and over again.”
Kendra Tanev is the kind of customer Starbucks is counting on.
“I collect the points, but … half the time they’re probably lost because I don’t really redeem them regularly,” she recently told CBC outside a Starbucks location in Calgary. “I’m going to buy the product anyway, so it doesn’t matter.”
CLOCK | Shoppers react to Starbucks’ new loyalty point system:
But there are also other customers for whom the change has left a bit like burnt coffee in their mouth: bitter.
Calgarian Sheldon Harrish said he used to go to Starbucks seven days a week, but the current era of high inflation has made him much more conscious of his spending, so lately he’s been drinking more coffee at home and going to Starbucks half as often as he used to .
The news that his loyalty points will soon be worth half as much makes him even more unlikely from now on.
“It’s becoming less and less of an incentive,” he said. “It makes you look for other alternatives.”
With Calgarian Megan Williams had similar thoughts. “I think I spend enough money at Starbucks as it is, the drinks aren’t cheap, so yeah, it definitely bothers me,” she said. “I probably won’t go that often anymore.”
loyalty test
Nicole Rourke, a marketing professor at St. Clair College in Windsor, Ontario, says it’s well known that loyalty points are a fairly inexpensive way for brands to acquire repeat customers, but they’re slowly being diluted to the point where they’re not lose their effectiveness.
“Most regular Starbucks customers buy the same things over and over again. If you make it more complicated for them to get free ones, I don’t think they like it,” she said. “They will come up with reasons why they should go somewhere else.
She said she recently spoke to her third-year class about the changes at Starbucks, and that the conversation between a group of brand-savvy young consumers was eye-opening.
“They already felt like it was a long time coming before they got big rewards back,” she said, adding that introducing the changes the day before Valentine’s Day “doesn’t make them feel the love…. It makes them feel like they want to be less loyal.”
