Business

Starbucks rewards program revamp angers customers

Starbucks has revamped its rewards program in both Canada and the U.S. so that people no longer earn rewards based on number of transactions but on how much they spend. That means small spenders may get short-changed.

Coffee house giant now doling out rewards based on how much customers spend

Starbucks customers will now earn reward stars based on money spent instead of number of transactions. (David Ryder/Reuters)

Today, Starbucks customers may have to spend more to reap the same rewards.

The coffee house giant has revamped its Starbucks Rewards program in both Canada and the U.S. so that people no longer earn one reward star per transaction.

Instead, stars are now earned based on how much a customer shells out: two stars for every dollar spent. And it will take 10 times more stars to earn a freebie.

The move has irked some customers who aren't big spenders.

"So now I need to spend more money to receive a reward?" a customer posted on Starbucks' U.S. site. "Time to hit the Dunkin' Donuts."

Previously, people had to rack up 30 stars to hit the gold level. At that level, they could score a free drink or food item for just 12 stars. With the new changes, it will take 300 stars to get gold status and 125 stars to earn a freebie.

For example, someone who only frequents Starbucks for one cup of $2 drip coffee per trip previously had to spend $60 to hit gold and $24 to score a free item. Now that person would have to spend $150 to reach gold and $62.50 for the free treat.

Of course, customers who enjoy more expensive drinks and food items could earn rewards faster under the new plan.

You asked for it

Seattle-based Starbucks said the revamp came as a result of customer demand. 

On its U.S. site, Aimee Johnson, senior VP of customer relationship management, posted a blog in February about the upcoming changes to the rewards program. "Your No. 1 request will soon be a reality," she announced.

But the news inspired countless negative customer comments.

"Stop trying to hide this money-making scheme under the idea that is is what the customers have been begging for," wrote one person.

"A real punishment to people who are straight coffee drinkers," added another.

Some stated they would be quitting the coffee house.

"You simultaneously insulted and lost some of your most loyal customers all in one fatal swoop," someone announced.

Only some will suffer

It will now take some customers more time to collect rewards, Starbucks Canada spokesperson Madeleine Löwenborg-Frick acknowledged in an email to CBC News.

But she says the "vast majority" of customers will earn stars at the same pace or faster than they did under the previous plan.

She adds that the revamped program includes new perks. For example, customers who make a purchase using their Starbucks card or app between April 12 and May 2 will automatically be upgraded to gold status. And if they're already gold members, their status will be extended for one year.

Customers can also look forward to new deals such as monthly "double-star days" and personalized offers, said Löwenborg-Frick.

But the added perks can't seem to quiet complaints from some unhappy customers. And the rejigged program was at least part of the reason one analyst downgraded Starbucks' stock.

Brett Levy, with Deutsche Bank, on Tuesday noted concerns about the company's valuation and possible disruptions caused by changes to its rewards program.

He wrote that Starbucks had previously stated that "it potentially expects to see some lost traffic" thanks to customers displeased with the new rules. 

Starbuck's stock closed down $1.40 US at $59.50 today on Nasdaq.

About the Author

Sophia Harris

Business reporter

Sophia Harris covers business and consumer news. Contact: sophia.harris@cbc.ca

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