Anger is brewing among some Starbucks Gold members who feel burned by the Seattle coffee giant’s new rewards program.
Starbucks revealed Tuesday that it’s moving to a tiered rewards system next month, which will scrap its elite Gold level that customers had reached by spending $150 or earning 300 “Stars” (aka points) within a year.
Under the current system, Gold members could get a free drink or food item for every 125 Stars that they earned (getting two points for every $1 spent), or two free drinks, two food items, or one of each if they accumulated 250 Stars. This system apparently had worked for the retailer, which reported that Starbucks Rewards transactions from the chain’s more than 16 million members accounted for about 40% of sales at its U.S. stores.
But beginning April 16 , customers will start earning rewards as soon as they hit 25 Stars (spending as little as $12.50) under a new, five-tiered system that gives gradually bigger gifts the more Stars that one earns by spending money. Customers could cash in 25 Stars for an extra espresso shot or a dairy substitute like coconut milk in their drink, or 50 Stars for a free hot coffee, hot tea or select bakery item — or stack them up and put 100 toward a coffee and a treat.
And some of those who have spent their time (and money) to reach Gold status before getting any rewards sound pretty steamed — especially as the food and drink freebies that were once a flat rate of 125 Stars apiece are now either 150 or 200 Stars.
“Just threw my gold card in the garbage. Not even worth it anymore,” tweeted one dissatisfied customer.
“The new @starbucksgold @Starbucks rewards is horrible,” another tweeted at the brand, calling the move “a slap in the face for people that have been gold for years.”
Yet another posted , “Those of us who have been Gold for YEARS are about to get ripped off SO HARD. 125 for a reward up to 200 stars for my latte reward? Seriously?” She added that many people like herself “don’t want the random lower tier rewards!”
A Starbucks representative told MarketWatch that “when considering enhancements to our program, our ultimate goal was to give our customers choice and the ability to make their rewards meaningful and personal. For example, we specifically created the 50-Star option for our members who love our hot brewed coffee and will now be able to reach that reward faster than before.”
Regarding complaints that scrapping the 125-Star flat rate means that some of the bonus drinks and sandwiches will soon “cost” 25 to 75 more Stars than they do now, he added that “items now available for redemption at 125 Stars [will become] available for 50 Star, 150 Star and 200 Stars, respectively. While Starbucks Rewards members will continue to earn 2 Stars for every $1 spent on eligible purchases at Starbucks, these updates will give members new choices and flexibility in choosing how to redeem their Stars for Rewards.”
Its social media team was also busy answering questions and complaints from Gold members online, posting different takes on this tweet : “We wanted to give you more options when it came to how you use your Stars. Now you can redeem as few as 50 Stars for a cup of coffee or 400 Stars for packaged coffee and select merchandise at participating stores!”
Matthew Ryan, Starbucks chief marketing officer, said in a press release that “since introducing Starbucks Rewards 10 years ago, we’ve experienced tremendous growth and continued to evolve the program to meet the changing needs and purchase patterns of our customers. These new updates put choice in the hands of our customers and a personal touch they can only get from Starbucks.”
Ted Rossman, industry analyst at CreditCards.com, told MarketWatch that “occasional Starbucks patrons will likely benefit, but the most frequent Starbucks-goers could lose out,” from the new rewards plan. He added that Starbucks is making a “bold move” here, because businesses usually try keeping their highest spenders happy.
“Starbucks is doing the opposite. They’re trying to breed loyalty by dangling rewards at lower levels of spending,” he continued. “It used to cost about $150 in Starbucks purchases to earn the 300 Stars required for Gold status, and only then could you start earning free food or drink items for every additional 125 Stars (about $62.50 in Starbucks spending). So someone who only visited Starbucks occasionally would either fail to qualify for free stuff, or it would take a long time. Now, with the elimination of the initial 300-Star qualification and providing redemptions as low as 25 Stars (about $12.50 in spending), Starbucks is giving occasional customers greater access to freebies (which I’m sure Starbucks hopes will turn them into even more regular customers).”
Sara Rathner, NerdWallet’s credit card analyst, agreed that the new program is tailored for more casual shoppers. “Ultimately, the extra flexibility of the program will bring more value to more people,” she said. “Especially those with the Starbucks Rewards Visa Card who earn 13 Stars per dollar with the sign-up bonus, instead of the usual two per dollar you’d earn through the rewards program.” Also, those with a Starbucks Rewards Visa credit or prepaid debit card get perks such as Stars that never expire (otherwise, Stars expire six months after they’re earned, but customers will no longer lose their rewards status for not earning enough Stars, the way they would under the old rewards system.)
Indeed, those customers who haven’t been able to reach Gold status praised the new system for giving them a taste of the freebies at last. “Finally! I have bought so many Starbucks drinks and no reward yet,” wrote one fan on Twitter.
Granted, people in general don’t like change. When Starbucks switched to its current rewards system in 2016, many people were just as upset. So no matter what changes it made to its reward system — or even if it kept it the same — some customers were going to be unhappy.
“I think people get so heated when rewards programs change because everyone loves free stuff. When it comes to free flights, free hotel stays, free coffee … anything free makes us feel like we’re beating the system,” said Rossman. “So when that changes, we get apprehensive that the change may not be in our favor, or we’re going to lose this free perk we used to love taking advantage of.”