The ‘New’ Starbucks Rewards Program: What you need to know

Loyalty programs are always changing. I’ve written before about how loyalty programs are changing a lot to spend based programs, much to the chagrin of customers. Starbucks Rewards program is the latest program that’s moving in that direction.

Changes to the Starbucks Rewards Program

Starbucks recently announced changes to their rewards program. The primary change was made to how stars are redeemed. These changes go into effect from April 16^th onwards.

Program Basics

For the purpose of analysis, we’ll refer to stars as points, which they essentially are.

Earning

Starbucks frequently runs promotions where you can earn more bonus stars by completing certain tasks. If you visit Starbucks multiple times during the week, then there aren’t very difficult to complete. For every dollar spent at Starbucks, you’d earn 2 Starbucks points. This isn’t changing. Starbucks offers what’s called as ‘Double Star Days’ on which you can essentially get 4x points per dollar spent each month. As the name suggests, they only run this promotion on one day every month.

For example, their most recent promotion was one where you could earn 25 bonus points for making 7 purchases and 150 bonus points if you were to make 9 purchases in a week.

Redeeming Starbucks Stars

Here’s where the changes are really going into effect. The earning side of things is largely going to remain the same. However, major changes are happening on the redemption side. Previously, you could use 125 points to redeem anything on the Starbucks menu.

Clearly it looks like people were hoarding points in order to redeem them for high value items like sandwiches or protein boxes. They often range from $6 to $10.

New Redemption Structure

With this new redemption structure, you’ll have to dish out more points if you want to redeem a more expensive item on the menu. While you’ll still be earning points at the same rate, your redemption will be in a way tied to the price of an item on the menu.

New Redemption Chart

Here’s the new redemption Chart based on information from the Starbucks website. It displays information about redemption values and the type of item on the menu. More details about the new program can be found on this page.

Sweet Spots

In spite of the current changes, there emerges a sweet spot for our redemptions. I primarily visit Starbucks for a cup of coffee, either hot or iced. I find this change largely positive since it gives me the option of redeeming just 50 points for a cup of coffee. Also, if you have Gold status with Starbucks, you can still get free refills on brewed coffee during the same visit. If you were to redeem for a cup of hot coffee and a baked item, you’d have to spend 100 points. If you redeem for the same before April 16, you’d have to spend 250 points.

Clearly, this is a devaluation for those who frequently redeemed their points to get sandwiches, protein boxes or expensive blended drinks. Handcrafted drinks like iced coffee, lattes or frapuccinnos will now cost you 150 points instead of the current 125. That’s a straight 20% devaluation. If you still want to redeem your stars for these items, then today is the last day as the new redemption chart kicks in tomorrow.

The Pundit’s Mantra

If you love your daily hot coffee and baked good (cookie, brownie or banana bread), the new program offers you a great redemption opportunity. Barring that, this is largely a devaluation on the redemption side of things. I’m currently sitting on significant stash of Starbucks stars. I plan to use them largely for brewed coffee.

Do you visit Starbucks frequently? How do these changes affect your redemption strategy? Which items do you frequently redeem your Starbucks stars for? Let us know in the comments section.

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