Starbucks Rewards change starts Monday, free drinks cost more stars

2023-02-22 18:52:32 By : Ms. Sally Zhou

Inflation has driven up the prices of your favorite Starbucks drinks and is now coming for your free coffee.

The big picture: The Seattle-based coffee giant will update its popular Starbucks Rewards program starting Feb. 13 and will change how many “stars” are needed to get certain items, meaning you’ll need to spend more money to earn that free drink.

Why it matters: Starbucks has 30.4 million active U.S. loyalty members who drove 56% of sales in its last quarter that ended Jan. 1.

The coffee chains’ program changes are a devaluation of the rewards, analyst Ted Rossman told Axios, similar to what airlines and hotels have done with the free flights and rooms in their loyalty programs.

The changes with redemption tiers “better align the cost of product redemptions to our current pricing,” Brady Brewer, Starbucks executive vice president and chief marketing officer, said during the Feb. 2 earnings call.

With the program upgrade, Starbucks is changing some of the tier levels for award redemptions and shifting some items between tiers. Currently, 150 stars will earn even the most expensive drink: any size drink with any add-ons — like syrups and extra espresso shots.

The tier levels that are changing:

Yes, but: While a pastry goes from 50 to 100 stars and there is a 50-point difference for a handcrafted beverage, some stars shift down.

Between the lines: Starbucks said it is not changing how members earn rewards, which is two points per dollar when using a registered Starbucks card or one point per dollar with other payment options.

State of play: Not counting any star bonus opportunities, starting Feb. 13, a rewards member using a Starbucks Card will need to spend $100 to earn the 200 points needed to get a Frappuccino.

Here are the redemption tiers effective Feb. 13:

Flashback: Starbucks has changed its rewards program over the years and moved to a revenue-based program in 2016 instead of a one-star-per-transaction model.