Starbucks Launches Controversial Loyalty Program

Despite several customer complaints, Starbucks launched its newly revamped loyalty program on Tuesday.

This February Starbucks announced that it would be making a few changes to the rewards program, and customers were outraged to say the least. Under the new terms, instead of earning a Starbucks “star” or point for each purchase – regardless of the purchase amount – customers will now earn two stars per dollar spent, making it harder for many consumers to earn free beverages.

Before, members of the rewards program could earn a free drink for every 12 stars, but now with the new system in place it will take 125 stars to get a freebie. This means that the absolute minimum spend for a drink on the house is now $62.50. And while that’s not too much of a big deal for the everyday $6 spender, it will be quite a change for those who are used to getting a free drink after ordering a dozen tall lattes or similarly inexpensive drinks.

In an effort to make the new program more appealing, Starbucks is automatically upgrading customers to Gold rewards status – a status reserved for frequent Starbucks goers that allows for exclusive perks – if they make a purchase using their Starbucks card or app between April 12 and May 2.

For the customers who are already Gold, Starbucks promises to extend their status for another year if they make a purchase during the promotional period, reports Business Insider.

According to CNBC, the company’s “buzz” score dropped 50 percent in just eight days following the announcement. Customers took to social media to voice their negative opinions, some going as far as to say that they will no longer do business with the chain.

Analysts, however, claim that the new program will benefit the company.

“The more money spent, the more stars earned… which is, all else equal, more incentive to spend more money,” Nomura analyst Mark Kalinowski wrote in a research note. “From many customers’ perspective, it probably is viewed as being more fair — somebody spending $6 should earn more stars than a different customer spending $3.”

Customers can earn additional stars for mobile orders via Starbucks’ new app, which features a new homepage that gives customers a visual of their collected stars and spotlights the music playing in the store, in addition to giving customers personalized offers and the ability to track their rewards more easily.

Via Starbucks

Despite customer backlash, Starbucks president and chief operating officer Kevin Johnson stated that more than 500,000 customers have signed up for the rewards program since February.

In March, the company announced that it would be releasing a prepaid Visa card by the end of the year that will allow customers to earn rewards points towards free coffee, food and an increasing number of other perks each time they use the card.

“We’re bringing customers to the world of stars everywhere,” Johnson said at Starbucks’ annual meeting, when the card was announced.

Today, the Starbucks’ rewards program has more than 12.1 million active users.

[AP Photo/Ted S. Warren, File]

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