If you visit the Starbucks Rewards page, you will notice (among the many other things) on their website a thin banner informing you of changes coming to their Rewards program starting in April 2016 (they haven’t revealed the exact date yet). If you don’t want to read any further, here’s the summary: the changes favor people who spend a lot of money versus people who make multiple individual purchases.
With the new system, rewards are earned based on the purchase amount, not the number of transactions. So the more money you spend (regardless of how many transactions), the more rewards you earn. On the other hand, if you buy items one at a time, you will earn less in rewards. Significantly less if you buy a cup of coffee every time.
NOTE: my comments below are for people in the GOLD Rewards level. GREEN is really a transitional level ~ if you are hardcore about Rewards, you will quickly reach GOLD, and once you reach GOLD, you stay there as long as you earn 300 Stars every 12 months ($150 in purchases per year).
WINNERS and LOSERS of the new STARBUCKS REWARDS PROGRAM
With the current system (expiring at some point in April 2016), you earn a Reward when you collect 12 Stars. You earn one star per transaction, whether you pay $1 or $100 during that transaction. So if you just buy a cup of coffee, around $30 in purchases get you a FREE reward.
With the new system (starting at some point in April 2016), you earn a Reward with 125 Stars (yes, one hundred twenty five). You earn 2 Stars for every dollar you spend. You also earn and carry forward “partial stars”, so a $2.35 purchase gets you 4.70 stars. So you earn a Reward for every $62.50 you spend. If you are just buying a single cup of coffee or tea every time (as outlined in the paragraph above), it will take you TWICE AS LONG to earn a Reward. The equivalent of 24 “old” stars.
On the other hand, if you are a big spender (eg you get a loaded frapp or latte and food items) or if you are the volunteer that makes the office coffee run, you will earn Rewards A LOT FASTER. For every $62.50 you spent, you get a Reward. This is also beneficial if you frequently buy coffee beans or loose tea or equipment (coffee cups, K-cups, coffee machines, etc).
THE VALUE of A REWARD
Assuming you redeem your Reward for a $6+ item (lunch item or complicated drink), this is essentially a 10% reward. Not a bad percentage, since you also earn credit card reward points on the purchases or gift card reloads. If you are paying attention, a number of credit cards have Starbucks cashback specials (eg Bank of American has recurring 10% Cashback deals). IF you don’t find any of those offers, some grocery stores have occasional gift card discounts, and a few of those offers include Starbucks.
TIP: SAVE BIG PURCHASES for DOUBLE STAR DAYS
They are also planning to have “Double Star Days”. During those days, you will earn twice as many stars as you would normally. In other words, a purchase total of $31.25 would get you a Reward instead of the usual $62.50. So if you buy coffee beans or tea or coffee mugs and such, try to plan to buy those during Double Star Days.
Judging by the FAQ pages, the Double Star Days will be “surprises”, they won’t be the same time every month. They will notify members by email and via the app. So be ready 🙂
OTHER CHANGES
This is a plus, Rewards will no longer be triggered automatically. The Stars will remain in your account until you redeem them for a reward. Each star lives in your account for six months. When you redeem for rewards, the oldest stars are used up first. So you need to spend at least $62.50 every six months to earn rewards.
NOT CHANGING
What they are changing now (starting April 1st) are the amounts. The rest of the terms remain the same. You still get free coffee/tea refills, free birthday reward, you can redeem a reward for the same items as before, and things like that. If they are planning to change those, they are probably “saving” those changes for a future tweak, after everybody gets on-board with the new system. That’s how our corporate overlords operate 🙂
TRANSITION PERIOD
Most people will likely have some Stars left in their Rewards account in April 2016 when the new system kicks in. You won’t lose them. Those will be converted to “New Stars” using the old system. One “Old Star” will become 11 “New Stars”. This is actually a fair transition, since this is about as much as they are currently worth, one star is 1/12th of a reward.
THE PROGRAM is EXPANDING
As it was hinted at a few months ago in the press release, Starbucks is expanding their Rewards program to turn it into something bigger. The Spotify partnership was part of the strategy. Rewards will also be earned at Teavana, at Grocery Stores and if you participate in Special Offers, which could be some sort of a FatWallet or Plenti type of a rewards program. We will know more about these as they start rolling them out.
EVALUATING their PRESENTATION
There are two things that stuck with me while reading through their FAQ pages. First, at least they are not sugar-coating everything. In the five slide presentation box over there, the last slide points out who may be at a disadvantage (the one I pointed out above). So kudos to them for keeping it real.
Also kudos to them for how they are handling the transition period, your remaining stars will transition to the new system at a fair value based on the old system.
On the other hand, the way they have structured the new program, with “2 Stars per Dollar” is one of those sneaky things that give marketing and advertising and lawyers a bad name and low favorability ratings. To the innocent bystander it looks like now you earn 2 Stars, while before you earned 1 Star. This is what people on the street call bullshit. They could have easily done it so you earn 1 star per dollar, and a free reward for every 62 stars.
But that looks unfavorable to the layman, the 62 vs 1. Because most people are afraid of math more than they are afraid of monsters, a 125 vs 2 does not sound as scary, because who wants to do MATH? 🙂
MORE DETAILS
For more details, check their New Rewards Explainer page.
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