Monday, February 22, 2016

Starbucks Changed Its Rewards Program And People Are Not Happy - Daily Business

Luiz Filipe Carneiro Machado / Via Flickr: luizfilipe

Starbucks announced Monday morning that starting in April, customers in the U.S., Canada, and Puerto Rico who participate its rewards program will start earning points per dollar spent, and no longer per visit as in the current program.

The new system incentivizes higher spending and larger orders. Previously, customers earned one point, or "star" as they are called in the Starbucks system, per visit or transaction, and received a free food or drink item per 12 visits, no matter how much they spent. So if you ordered a $2 coffee every day, you could earn a reward after spending about $24.

Starting April, customers will earn two stars per dollar spent and will only receive a free item after accumulating 125 points, or spending more than $62.

Starbucks said it currently has about 11 million active rewards customers. Nationwide, its U.S. cafes receive 75 million customers each month.

Starbucks global chief strategy officer Matthew Ryan told investors this was "the number one customer-requested update" and "as we switch the mechanics of the program, we are not using it as an opportunity to opaquely weaken the rewards proposition." He added that most customers spend about $5, and "there are a small minority of people who would either be advantaged or
disadvantaged" by the change.

That disadvantaged group, however, is not pleased.

"If customers simply continue to engage as they currently do, instead of engaging more as we believe they will, the vast majority of our customers will earn rewards just as fast as or faster than they would today," a Starbucks spokesperson told BuzzFeed News.