Starbucks Updates Loyalty Program

The company is making its customers spend a bit more to get their free iced lattes.

January 06, 2023

ALEXANDRIA, Va.—It’s going to be harder for Starbucks customers to earn their free drinks, reports CNN, as the coffee giant is making changes to its rewards program beginning February 13.

Starbucks Rewards members will need to earn 100 stars before they can redeem their points for a free hot or iced coffee or tea, a baked good, a packaged snack or a to-go cup, up from 50 stars. Free lattes, Frappuccino or a hot breakfast item will require 200 stars (instead of 150), and members will need to earn 300 points to earn a free salad, lunch sandwich, protein box or packaged coffee, up from 200.

Starbucks Rewards members earn a star for every dollar they spend, and if they use a Starbucks card, they earn two stars per dollar. Bonus stars are rewarded for completing “challenges,” such as ordering a hot breakfast item three times during a specified time frame.

“The rewards program … is generating significant revenue for Starbucks,” said interim CEO Howard Schultz during a November analyst call.

In the three months ended October 2, 2022, the number of active Starbucks rewards members jumped to 28.7 million, up 16% year over year, reports CNN.

Members were notified of the changes via email in late December, according to Starbucks.

The company has been experimenting with its loyalty program in recent months. In October, Starbucks and Delta Airlines connected their loyalty programs, allowing U.S. customers who are enrolled in both Delta SkyMiles and Starbucks Rewards loyalty programs to earn one mile per $1 spent 1 on eligible purchases at Starbucks.

On days when enrolled members who have linked their Delta and Starbucks accounts have a scheduled flight with Delta, they will earn double stars on eligible purchases at participating Starbucks stores.

In December, Starbucks launched Starbucks Odyssey, which is an extension of the rewards program that allows users to earn NFTs.

Starbucks said that through these loyalty partnerships, the company aims to increase awareness and drive growth of Starbucks Rewards as well as attract new members by offering valuable benefits and making it easier for customers to join.

Last fall, Panera Bread updated its loyalty program to include choice-based rewards. Panera’s loyalty program, MyPanera, now allows members to select their reward from multiple options based on their personal preferences, instead of a single, pre-selected reward.

The company says the new benefit is rooted in MyPanera's relationship-based loyalty program, where rather than a transactional points system, members are rewarded based on frequency of visits, spend and their individual purchases and preferences.

MyPanera began in 2010 and has nearly 48 million members. Panera said its program is “rooted in the belief that the job of a loyalty program is to deepen the guest relationship by meeting both a guest's rational and emotional needs.”

Loyalty customers spend more at convenience stores, according to recent Paytronix research. In fact, convenience store in-store loyalty check sizes have eclipsed inflation. C-store loyalty members annually spend 38% more on average than other customers, and the report found fuel visits increased by 8% in 2021 for loyalty member customers. Also, the most loyal c-store customers are visiting businesses one or more times per day.

Look for “Welcome to the Club” in the February 2023 issue of NACS Magazine to learn how c-store loyalty programs are moving beyond simple points and rewards to a personalized experience.

A free NACS webinar is available that shows retailers how to improve their current loyalty program.

Also, NACS published a free report on how convenience retailers can build loyalty program affinity beyond rewards and provides insights on c-store loyalty programs, shopper expectations, program engagement, personalization and program access/communication. Download the report: Driving Engagement From Convenience Retail Loyalty Programs.