- Starbucks is rolling out its new rewards program on Tuesday, with a series of massive changes.
- Customers are freaking out over disappearing stars and concerns that they will have to spend more money to earn certain popular rewards.
- In some cases, they’re right to worry.
Starbucks is making some massive changes to its rewards program, Starbucks Rewards, sending coffee lovers into a frenzy.
On Tuesday, the coffee giant is rolling out its new rewards program, changing how many stars customers have to earn to get free food and beverages.
Starbucks’ rewards program is seen as one of the best in the restaurant business. In January, the company reported that it had 16.3 million active members in the US, a year-over-year increase of 14%.
With such a massive customer base, tweaking Starbucks Rewards can be a risky game. And customers are already worried that they could be ripped off under the new system as Starbucks works to win over more casual coffee drinkers.
Many people are freaking out about the disappearance of their stars, which Starbucks Rewards members can cash in for food, drinks, and other items. Customers typically earn two stars for every $US1 they spend.
“We’re resetting your Star balance with this change,” Starbucks said in an email to “green” program members on Monday. “Because tomorrow, every new Star you earn will add up to Rewards, big and small – that means more of your favourites free.”
Previously, customers became green members when they first signed up for the loyalty program and gold members when they earned at least 300 stars in a year. Only gold members could redeem stars for free items.
@Starbucks how y’all just gonna take all my stars like that ????
— t$helly (@tee_shells) April 15, 2019
If you’ve already achieved Starbucks gold status, don’t worry: You’ll get to keep the stars you have earned.
However, if you aren’t a Starbucks gold member, it looks as if you’ll lose all your stars.
— dani dank (@ItsDaniDank) April 15, 2019
Starbucks did not immediately respond to Business Insider’s request for comment.
People have to spend more to get some of their favourite drinks
While some people are concerned about losing stars, others are worried about stars being devalued.
Previously, gold members could cash in 125 stars for any food or beverage. Under the new program, customers will continue to earn two stars for every dollar spent, but the chain will offer a tiered program, so they can cash in stars after spending less money.
When a customer earns 25 stars, they can customise their drink with an extra espresso shot, flavour, or dairy substitute; at 50, they can get a brewed hot coffee or tea or a bakery item; at 150, they can get a handcrafted drink or a breakfast item; at 200, they can get lunch; and at 400, they can get select merchandise or bagged coffee.
Many people are displeased that the handcrafted drinks and food – some of the most popular rewards – will now “cost” 150 stars instead of 125.
It’s outrageous. What a rip! So now you have to spend $75 dollars to get a free drink? It used to be sound $36. What a rip! I’m done playing the stupid stars collection game.
— mommytaps (@fatcat8250) April 15, 2019
The original #starbucks program was 12 stars (or 12 drinks). If you estimate $3 to $4 per, it was $36-48. Then, it moved to 125 – $62.5. Same with the birthday rewards. It used to be a free drink in your birthday month. Then, it was same week. Now, it needs to be same day. https://t.co/hItf5aX8Tg
— ☀️????ashleigh????☀️ (@AshDee04) April 15, 2019
PSA: final day before Starbucks rewards devaluation – last chance to get whatever you want from the menu for only 125 stars
— L V (@LVTravelWiz) April 15, 2019
Just got @Starbucks email about "exciting changes" to Star Rewards. Free drink now costs 150 Stars instead of 125. I guess that's exciting for THEM. The rest of us view it as a poor way to treat loyal customers.
— Andy Collins ⚾️ (@AndyNY2) April 15, 2019
So is it actually a worse deal?
In the old program, customers would have to spend $US62.50 to get a free drink or food item, which Mizuho Securities estimates to be worth roughly $US5.50. Though strategic customers might get a more expensive item, that’s about a 9% return.
With the new program, customers can get a brewed coffee or bakery item after spending $US25, an 11% yield. But it’s an objectively worse deal for handcrafted drinks and breakfast sandwiches: Under the new program, customers will need to spend $US75 to get the roughly $US6 item for free, an 8% return on investment.
Starbucks superfans are losing their advantage
As of Tuesday, it will no longer matter whether you’re a loyalist or using the rewards program for the first time.
“Currently there are two levels to the Starbucks Rewards program,” a representative for Starbucks told INSIDER when the change was announced. “Starting April 16, Starbucks Rewards will move to a single-level program where all members can begin to earn Stars toward free Rewards from the day they join.”
Some analysts are predicting that Starbucks loyalists might feel betrayed, as gold members and new members alike will receive the same rewards. Jeremy Scott, a Mizuho analyst, said he expected “some noise with some of its more loyal members” in response to the change.
“Through a new tiered redemption system, the program will meaningfully increase the rewards yield for ‘entry-level’ customers while reducing the yield for its more premium members,” Scott wrote in a recent note. “The move is a reversal of sorts from the 2016 transition, which benefited larger spenders, but it’s in concert with the company’s strategy to grow frequency among its more casual customers.”
Stores could be more chaotic
Starbucks customers are likely to deal with a bit of chaos as employees and coffee lovers transition to the new rewards system.
“We expect most of the headaches will come from customer confusion with the new system, especially in-store, where it may take an extra beat in the transaction,” Scott wrote in his note.
“Your account information may take a little longer than usual to update or be unavailable while we make these exciting changes,” Starbucks said in an email to customers on Monday. “We thank you in advance for your patience.”