I Predict: Starbucks Stars Earned Based Upon Dollars Spent.
I predict that someday, sooner or later, Starbucks MyStarbucksRewards loyalty rewards program will give you stars based upon dollars spent, not “per transaction.” If I had to make a wild guess, I’d say it could happen within 12 months, but to be clear, that’s a wild guess.
CURRENT MYSTARBUCKSREWARDS PROGRAM:
The current program gives one star each time your registered Starbucks card is swiped as a form of payment at the register. There are some exceptions: If you are purchasing at-home coffee at Starbucks, you earn one bonus star for each at home coffee item. If you are only using your card for a free refill (that is you didn’t pay for anything), you don’t earn any stars.
So under the current program, under most circumstances, one swipe of the card equals one star. Now and then, MyStarbucksRewards members may receive tailored promotions for bonus stars for specific items, but that’s an exception to the basic principle: one swipe of the card equals one star.
Currently, once your Starbucks.com profile reaches Gold level, then every 12 transactions earns you a free food or beverage. Those rewards are valuable. Do you want lunch panini as a reward? No problem. It’s food or drink. The MyStarbucksRewards rewards can be used on almost all food and drink inside the store. However, you can’t buy beer and wine with the rewards, nor can you use them on the Starbucks Evenings category food.
A MyStarbucksRewards member reaches gold level status by earning 30 stars within one year. Once you’re gold, you have to maintain that by earning 30 stars each year. It’s not a permanent gold status.
One good question would be simply to ask, how much is a customer spending to earn that free reward? You might have heard it said that the average customer spends $5 per transaction. Higher numbers have been reported as well. In January this year, Eater.com reported that the average Starbucks customers spends $7.67 per transaction. When it comes out in the wash, after literally tens of millions of transactions per week, it’s easy to believe that on average customers spend at least $60 to reach a reward. Some spend much more! If he or she gets a $6 or $7 using the reward, he or she has been rewarded at the level of roughly 10% back. At $5 per transaction, that’s $60 spent to get a reward. If the average person is spending $7 per transaction, that’s a little over $80 to get a reward. Probably Starbucks expects that there will be many customers who use a reward valued between six and eight dollars.
Once in a while, I’ve seen both customers and partners livid that one particular person got a very expensive drink, or divided up their purchase into multiple transactions. You cannot look at isolated transactions and make any statements about the health of MyStarbucksRewards. That kind of tunnel vision is not helpful. You have to look at the aggregate to understand this program.
I promise you, if Starbucks thought that MyStarbucksRewards was a bad idea, they’d end it. It’s delusional to think that a sixteen billion dollar corporation hasn’t figured out how to take care of themselves.
Once in a while, I’ve heard both customers and partners say, “They’ll never change MyStarbucksRewards.” We learn from history. The program has already been through many changes since rewards were introduced in 2008. We know that Starbucks constantly re-evaluates the program to make it more consistent with what customers are asking for and to keep it profitable and worthwhile for the corporation.
What would a rewards program look like with MyStarbucksRewards stars per dollar spent? You’d probably have to spend between $60 and $80 to get a reward.
In response to those who think MyStarbucksRewards will never change, let’s look at how it has changed over the years:
HISTORY OF REWARDS AT STARBUCKS:
March – April 2008: The first generation of MyStarbucksRewards were announced at the March 2008 Starbucks annual meeting of shareholders, and went into effect in April 2008. There were no levels. You registered a card, put money on it and you got free soy milk, free syrups, a free tall any coffee when buying whole bean coffee, and free refills. Here’s an April 2008 official Starbucks blog article on that first phase of rewards. Before April 2008, there were no rewards at all at Starbucks.
November 4, 2008: Starbucks offered a black gold card. This program was phased out in just one year. You paid a fee up front to get the black gold card and then earned 10% off each transaction at the register. For a while, there were two side-by-side rewards programs. A 10% off black gold card and the April 2008 version of the rewards program. Many people complained about having to pay a $25 membership fee.
December 2009: By December 2009, MyStarbucksRewards went through a major overhaul. You earned stars per swipe of the card. The first levels (Welcome, Green, Gold) were introduced. And every 15 stars you earned a free drink (not food). This version of the program kept the free tall beverage with a pound of coffee, though now a Green level perk. By late December 2009, the earlier April 2008 version of the program had ended.
October 2012: On October 16, 2012, a new version of MyStarbucksRewards went into effect. The number of stars needed to earn a free rewards dropped from 15 to 12. For the first time, you could use your reward on food. The free tall any-beverage with the purchase of a pound of coffee was axed – removed from being a perk. By October 2012, the only Green level perk was free refills in store (as it is now too). This was also the beginning of electronic rewards on the app or by the swipe of your card. Before October 2012, you got a paper postcard in the mail that you took to the store to redeem for your reward.The perk of free soy milk or syrups also came to an end with the October 2012 major overhaul.
October 2013: Starbucks added additional food perks available as a reward. By October 2013, you could use your reward on just about any food item in the store. (Evenings food option were not included, and to this day are not included).
March 2014: Starbucks added bonus stars for at-home coffee purchases, when purchasing whole bean coffee, Via Instant coffee, Verismo pods, or K-cups in a company-operated Starbucks location.
For a long time, customers have asked for stars based upon dollars spent. If you go to MyStarbucksIdea.com and type in the search box anything like “stars” and “dollars” you’ll get tons and tons of ideas about stars per dollars spent.
With 10,000,000 MyStarbucksRewards members, it all averages out. Starbucks could easily figure out how to do this. I know that there will be some people in the comments who complain that Starbucks can’t afford to do this. Trust me, Starbucks knows how to make a profit. And MSR members are valuable: they come back more often and spend more.
There hasn’t been a major overhaul of the rewards since the big 2012 changes. It looks like traditionally, Starbucks announces major MyStarbucksRewards changes in the fall or winter season.
Who knows? Your guess is as good as mine. I just don’t see any rational reason why it couldn’t happen.