AP Photo/Ted S. Warren
- Starbucks debuted a new rewards program on Tuesday.
- The new Starbucks Rewards system offers different rewards for different "star" counts, with some of the most popular foods and beverages requiring customers to spend more before cashing in.
- Many customers are furious about the changes, saying that Starbucks is being stingy and threatening to ditch the coffee giant.
Starbucks is facing backlash after making some massive changes to its rewards program.
On Tuesday, the coffee giant rolled out its updated Starbucks Rewards program.
Under the old Starbucks Rewards program, customers could get any food or drink for free after earning 125 stars. Typically, customers get two stars for every $1 spent at the chain — something that hasn't changed with the updated program.
Under the new Starbucks Rewards program, however, customers have multiple benchmarks where they can cash in their stars for rewards. Customers can get rewards faster, with the option to make minor customizations for free in exchange for 25 stars. However, some of the most popular rewards — such as Starbucks' lattes, macchiatos, and other handcrafted drinks — now require 150 stars, an increase from the old program.
With the change, many customers feel that their stars are being "devalued."
Tweet Embed://twitter.com/mims/statuses/1115439997807501313?ref_src=twsrc%5Etfw
I like how @Starbucks notifies me of this great new rewards program with all these "options" when really they are just devaluing the points. pic.twitter.com/TlJsIaWcvyTweet Embed:
//twitter.com/mims/statuses/1117862713148039170?ref_src=twsrc%5Etfw
Oh, @Starbucks. Revamping your rewards plan to include smaller "upgrades" is nice. Upping the amount of rewards needed to purchase coffees and food items? Not so nice.Tweet Embed:
//twitter.com/mims/statuses/1117855302458564610?ref_src=twsrc%5Etfw
. @Starbucks your new rewards "options" suck. You're not giving anyone more choice; you're just giving your bottom line more $ and fewer expenses when it comes time for a redemption. You want to improve the rewards program? Keep redemption values at 125.
Starbucks' Facebook page has been flooded with angry comments.
"Your new rewards program does nothing for me but alienate me," reads one Facebook comment. "I use my rewards typically for breakfast sandwiches a treat I look forward to as a reward from participating in the occasional challenges you offer. When I went to bed last night I had two reward sandwiches coming this morning I wake up and I have one."
"Well Starbucks, until you bring back your old reward program or make significant changes I will happily be buying my coffee elsewhere," reads another.
"The new reward system will have me picking any other coffee shop other than Starbucks going forward," reads a third. "You have lost a frequent customer and I could care less about the rewards program now."
Tweet Embed://twitter.com/mims/statuses/1115389225178943488?ref_src=twsrc%5Etfw
The new @Starbucks rewards is absurd. First it was 12 visits for a rewards, then it was 125 stars (aka more money spent) and now it's 150 stars. How is this efficient for loyal customers?Tweet Embed:
//twitter.com/mims/statuses/1118117012880920577?ref_src=twsrc%5Etfw
I like how @Starbucks is playing off the new rewards format as "yay! more choices for you!" when, in fact it just costs me more to get the rewards I actually want. #aspadeisaspade #nicetry pic.twitter.com/s3Wr4ouSRnTweet Embed:
//twitter.com/mims/statuses/1118137199562821632?ref_src=twsrc%5Etfw
So @starbucks 'revamps' their rewards program and now it's going to cost me more stars for a free latte? #wtf you trying to be sneaky @Starbucks? #notcool
In the old program, customers would have to spend $62.50 to get a free drink or food item, which Mizuho Securities estimates to be worth roughly $5.50. Strategic customers might get a more expensive food item or beverage, but that's about a 9% return.
With the new program, customers can get a brewed coffee or bakery item after spending just $25, an 11% yield. But, it is objectively a worse deal for handcrafted drinks and breakfast sandwiches. Under the new program, customers will need to spend $75 to get the roughly $6 item for free, an 8% return on investment.
Some analysts are predicting that Starbucks loyalists might feel betrayed, as gold members and new members alike will receive the same rewards. Mizuho analyst Jeremy Scott said he expects "some noise with some of its more loyal members" in response to the change.
"Through a new tiered redemption system, the program will meaningfully increase the rewards yield for 'entry-level' customers while reducing the yield for its more premium members," Scott wrote in a recent note. "The move is a reversal of sorts from the 2016 transition, which benefited larger spenders, but it's in concert with the company's strategy to grow frequency among its more casual customers."
NOW WATCH: What makes macadamia nuts the most expensive nuts in the world, at $25 per pound
See Also:
- People are freaking out over the massive changes Starbucks is making to its rewards program. Here's what you need to know.
- A small robotics company created a device retailers were clamoring for, and now Walmart is putting it in 350 stores
- Beyoncé's collaboration with Adidas could help the company win over a key customer — and Nike should be terrified
