Starbucks changes rewards program and customers are seeing stars

Starting in mid-April, the coffee giant is making a change in its “My Starbucks Rewards” loyalty program whereby members will earn points, or “stars”, based on the dollars spent on the purchase.

The new Starbucks Rewards system requires customers to earn 300 stars before they are Gold level. After earning 12 stars, a member receives a free drink or food item of their choice.

Under the current terms, loyalty program members can buy a $2 coffee 12 times – spending $24 – to receive a freebie. It means that those who spend less per visit to Starbucks will now find it harder to get a reward.

The change comes as Starbucks has been pushing to get more people signed up for its My Starbucks Rewards program.

Once at the gold level, customers will have to have 125 stars before they can redeem a reward versus 12 stars under the old program. For every $1 spent, you’ll get two stars.

Bottom line: If you spend less than $5.21 per visit, on average, the new Rewards scheme will be less rewarding than the current program. “The vast majority of our customers will earn rewards just as fast or faster than they do today”. Well, Starbucks is also changing how “gold” status and perks are calculated.

Fewer than one in six of the estimated 75 million customers who visit Starbucks in the US each month are members of the rewards program, Starbucks’ chief strategy officer, Matt Ryan said on the call. Under the prior plan, Gold members had to amass 30 stars this calendar year to maintain their gold status.

The practice, according to Starbucks, involved many customers asking baristas to ring up one item at a time to collect more stars for a specific transaction. The company says it increased the number of members by more than 50 percent over the last two years, and that those 11 million members spend three times as much as nonmembers.

While on the surface it doesn’t sound like a big change-and, in fact, it nearly sounds advantageous-Starbucks essentially moved the goal posts way back, meaning it’s going to take more spending to get more freebies. “I mean it’s to get us to spend more money”, he said.

The change will benefit people who spend at least $5 per visit, as they will still reach gold status in about 30 trips to Starbucks.