Is the Starbucks Rewards program a good deal?

 

Starbucks is one of those chains that people love to hate. Some may scoff entirely, preferring (arguably better) local coffee shops, while others go there five times a week minimum. Sometimes people complain about Starbucks while in line for it. People’s attitudes toward Starbucks seem ambivalent at best, including mine.

To contribute to this ambivalence, I add Starbucks Rewards, a loyalty program. I looked into it recently, and offer my review of the program here.

How to think more about Starbucks

Starbucks Rewards, like all loyalty programs, it is designed to reward you for being a repeat customer. Basically, every time you buy something at Starbucks, you get a star. When you earn five stars in a year, you reach the Green level, which gets you free refills on drinks (a slightly frightening thought, but whatever). When you earn thirty stars in a year, you reach the Gold level, which gives you the ability to get a free drink every twelve stars.

Chances are, yes.
Chances are, yes.

And in addition, just for joining, you get a free drink on your birthday, and various coupons and discounts depending on where you are in the program. (Apparently, they used to offer free soy and syrup shots, but not anymore.)

The free drink is certainly a nice perk (a 7% discount over the long term). You can even get creative with your free drink; I recently read about someone who brought in his own vase mug and bought a sixty shot, 128-oz drink.

Being loyal

I frequent many coffee shops and food carts around town, and have plenty of loyalty cards. Most of them operate as punch or stamp cards: every time you show up, you get a punch or a stamp. Once the card is filled up, you can redeem them for a free drink or meal or whatever.

Starbucks is much more technologically savvy. Your “stars” are tied to your online account, which can be accessed using your various digital devices.

To earn a punch on my card in my usual spot, I can pay anyway I want: cash, debit card, credit card, whatever (I don’t think they accept checks).

But with Starbucks, if you want to earn a star, you must pay with the Starbucks Card.

Membership has its restrictions

The Starbucks Card is a reloadable stored-value card, like a gift card. You put money on the card in advance, and then pay for your purchases out of the reserve of money.

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And here is where I have a problem. Because I believe that it is through this mechanism that Starbucks influences you to spend more money on Starbucks. Good for them, but not for you.

Here’s how they get you

The act of spending money feels significant, and can influence behavior accordingly.

When you load money onto a gift card, that is the point where you feel like you have spent it, not the point at which you use the gift card. And herein lies an issue: with the Starbucks card, it doesn’t feel like you’re using real money, so it’s easier to spend it. This means that you may spend more than you anticipated, because, hey, it’s already on the card. Drinks are on me this time.

The rebuttal here is usually “but I go to Starbucks all the time, so I’ll end up spending that much there anyway.

Perhaps. But because you’ve “prepaid” your Starbucks, you’re more likely to go to Starbucks in the first place. If I have $25 on a Starbucks Card, and I’m standing by a different coffee shop, I’m still likely to go to Starbucks, since I’ve “already paid for it”. Even though I haven’t. This doesn’t necessarily make you spend more money per se, but it seems like a sneaky way to get your business.

Now, I guess you could in the moment right before purchase load up the card with exactly the amount you are planning to spend, keeping a zero balance on your card. This could work, but it seems like a bit too much work just for a free drink every once in a while.

Verdict

So in summary, I don’t think the Starbucks Rewards program is a great deal, even if you go to Starbucks all the time. It’s not a terrible program, and there are certainly ways to maximize your rewards, but the subtle ways in which it reinforces repeat business and increased spend make it a program with as much to lose as to gain.

Don’t get me wrong, I’m a big fan of Starbucks. I think their soy chai latte is pretty much unimprovable. I’d say that I spend an average of $25 there in a given month. But I’m not going to load $25 on a Starbucks card. Starbucks will have to draw me in the usual way, by being absolutely everywhere enticing me with a superior product.

But enough about me. Are you a member of the Starbucks Rewards program? What do you think of it?

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