Here Is What Starbucks Fans Think About Company's New Rewards Program
On Tuesday, Starbucks' (SBUX) - Get Report major changes to its popular My Starbucks Rewards program, originally announced in February, went into effect in the U.S, Canada and Puerto Rico. Among the biggest changes -- and the one that initially drew the most criticism by consumers back in February -- will be that stars and rewards will be awarded based on dollars spent, not the number of visits. In the new system, customers will earn two stars for every dollar spent, instead of a star simply for every visit, no matter how much money they spend. For every 125 stars accumulated as a Gold level member, which would cost $62.50 to accrue, members will receive a reward for a free drink or food item. Under the old system, they'd get a free item after every 12 stars accumulated. 'The intent behind it [the rewards changes] was to level the playing field for our customers, taking into account how often they visit and how much they spend,' explained Starbucks president and COO at the company's Mar. 23 annual shareholders meeting. Starbucks is tinkering with what has been one of the most successful rewards programs in the restaurant business. In the first quarter ended Dec. 27, members in My Starbucks Rewards surged 23% year over year to 11.1 million. Over 21% of total U.S. transactions were paid using the Starbucks mobile app during the quarter. Starbucks estimates that its My Starbucks Rewards program has grown about 50% in the past two years. TheStreet visited a Starbucks in New York City to gauge the consumer response to the rewards program changes.
