Program switches to rewards based on amount of money spent in stores.
The Seattle-based coffee chain Starbucks has announced a change in its loyalty rewards program, and it means most people will have to pay a little more to reach the reward plateau, according to an article on Fox News.
The company is moving away from a transaction-based program for rewards to one that awards points, or stars, based on the amount of money spent instead. The current loyalty program allows for a star with each transaction, with customers being to collect a free food or item of their choosing after accumulating 12 stars. The new program rewards two stars for each dollar spent at the coffee shops, with 125 stars being the redemption point for free items.
In an example cited in the article, a customer making a $2 purchase every day could receive a free item after spending $24 over 12 transactions, while another customer, purchasing a more expensive item each day at $4.45, would have spent $53.40 over the same 12 transactions to receive their premium.
Starbucks is promoting its loyalty program in an effort to enlist new members. The company reported it had 11.1 million loyalty program participants in the United States last month, which is a 23 percent increase over the previous year. The coffee giant has said the members of its program spend three times as much in the stores as those who are not members, and the company is looking to those members to help increase the profits.
Starbucks Chief Strategy Officer Matthew Ryan said the vast majority of the firm’s customers will continue to receive their awards at the same or a very similar rate as before with the new program award rules. He did admit, in a call to analysts, a small minority of customers will earn their awards at a slower rate under the new system.
Ryan pointed out that some customers have been ordering multiple items separately, to increase the number of transactions credited to their loyalty purchases, and that practice has led to increased wait times at store counters. These type transactions only account for about one percent of all the counter purchases.