If you visit Starbucks regularly, you may have been lured into joining its loyalty program, Starbucks Rewards. And if you weren’t paying careful attention, you might not realize the evil genius behind this program.
Yes, Starbucks is on a mission to get you to drink its coffee, buy its food and keep coming back for more. That’s what every business does, though. Starbucks reported $19.6 billion in revenue last year, and approximately 20 percent of customer transactions take place on its app.
But what happens when a company makes promises for rewards points in exchange for purchases, only to water down the currency?
That’s what Starbucks did. Taking a page from the playbook of the leaders of the loyalty program world — credit card points, frequent flier miles, and hotel points — Starbucks took what its customer base generally viewed as a good thing and made it more difficult to earn points and redeem rewards.
Starbucks calls its rewards points “Stars,” and until recently, customers were awarded a complimentary item of their choosing after accruing 12 Stars. Starbucks recently shifted its program away from a simple system of one Star per visit to a rather complicated system whereby customers accrue Stars based on dollars spent.
But Starbucks didn’t simply change the program so that customers would accrue one Star for each dollar spent. That would mean a complimentary reward would cost only $12. Instead, Starbucks rewrote the rules entirely, introducing a complicated formula that grants two Stars for every dollar spent, with a complimentary item awarded once a customer has tallied 125 Stars.
That places the dollar value of a complimentary item at $62.50. Starbucks probably didn’t think the average customer would figure that out.
I have a hard time with the Starbucks Rewards program for good reason — I’m a Starbucks junkie. I’m not proud to admit it, and perhaps in a bygone era I’d be smoking unfiltered Camel cigarettes, but Starbucks is my go-to thing when it’s time to get down to business.
I joined Starbucks Rewards in October of 2014, and by December I had achieved Gold status. Congratulations, Ms. Monsell, you’re great at spending money.
Starbucks sent me a shiny, gold-colored, personalized membership card in the mail. I mention that it’s gold-colored because the fine print in Starbucks’ membership program points out that the card is not actually made of gold.
In the old system, in addition to granting members one Star per visit, Starbucks issued personalized promotions through the app, known as “challenges,” which would promise extra Stars for certain types of purchases, known as “Bonus Stars.” An example of such a promotion would be “Buy 3 lattes by June 1 and earn 6 Bonus Stars. Stars will automatically appear in your account by June 10.”
My experience with challenges was frustrating, to say the least. Spending money on Starbucks’ schedule was the easy part. But getting Starbucks to turn over the Bonus Stars, I discovered, was difficult. Stars would not automatically appear on my app as promised. I had to routinely call Starbucks customer service, which would review my account, verify my purchases, and manually add the Stars.
They were always pleasant and quick to issue the Stars, but it happened so frequently that I wondered if the omission wasn’t by design.
More recently, I searched Starbucks’ help site, which features this very problem as a Frequently Asked Question. The answer draws attention to the complexity of the hoops through which customers must jump to earn the Stars — from codes, to points, to formulas. It’s mind-numbing.
Between the watering down of the value of Stars and the time involved in asking for Stars that should automatically appear, this program suddenly feels like it requires a bigger investment — both in dollars and in time.
Like a frequent flier program, Starbucks’ Stars now expire after six months if the customer hasn’t accrued enough for a complimentary item in that period.
By using its app, you agree that Starbucks:
- collects your data, including information on your phone and posted to social media, and shares it with third-party companies for marketing purposes;
- tracks your activity — because despite the existence of Do Not Track browser settings, Starbucks discloses that it doesn’t respond to anti-tracking software;
- should be indemnified by you for any use or misuse of its site, including payment of its attorneys’ fees;
- disavows all liability related to losses due to “communications failure, theft, destruction or unauthorized access to Starbucks’ records, programs or services.”
In other words, use at your own risk. And if the 2015 attack on Starbucks’ mobile payment system wasn’t a wake-up call that risk is out there, perhaps you need an espresso shot in that venti Pike Place roast you’ve ordered.
But, you know — you might just consider paying in cash.