Starbucks announced Tuesday, on its blog and through e-mails, changes to its My Starbucks Rewards Program.
“We regularly evaluate our program to see how customers are using it,” Starbucks spokesperson Linda Mills told Loyalty 360. “We wanted to be able to deliver the best benefits to customers and to be able to deliver them digitally. They won’t have to wait for a postcard. They will get their rewards immediately.”
The primary change customers had requested, according to Mills, was the end of postcards for rewards. When the revised program starts on Oct. 16, customers will receive their rewards digitally on their Starbucks card, with an e-mail notification from the company for each new reward. The customer will be able to redeem the reward using the card or the Starbucks mobile app.
Those customers who still have free drink postcards can use them up to the expiration date at any of the participating stores. The company has 9,000 stores in the U.S. and 17,000 worldwide as well as thousands of other licensed locations (e.g., hotel coffee bars with the Starbucks brands). Many of the licensed locations will not be able to accept the digital rewards, according to Starbucks, though the company said it is working to change that.
Gold level rewards members will be able to earn a free drink after every 12 starts earned, rather than after every 15, and will be able to use the reward for a food item rather than for a drink.
There was some early backlash from some customers commenting following the post on the Starbucks site about the changes, primarily about the loss of free syrups and soy – which some lactose intolerant commenters were particularly upset about. Starbucks is also eliminating the free tall beverage with a bag of whole bean coffee.
“While more members will receive more overall value with the new program, we know losing certain benefits will be disappointing to some customers,” said Matthew Guist, Starbucks’ director of global brand loyalty, in a blog post announcing the rewards. “The benefit of this new structure gives members the ability to earn rewards 20 percent faster and provides more choices in their rewards.”
Mills added that those elements of the rewards program were used by only a very small segment of program members, so Starbucks thought the tradeoff for the other enhanced rewards will be a good one for customers.
Mills said that going to digital rewards is the next natural step in the evolution of Starbucks’ loyalty program. Another evolution will be the addition of the Square payment system. Later this fall, Starbucks customers will be able to use Pay with Square to pay for their purchases at participating company operated Starbucks locations in the U.S. Customers simply need to download the Pay with Square application and set up an account on their iPhone or Android devices.
Starbucks was one of the major investors’ in the $200 million dollars in venture capital funding on which Square recently closed.