I’m through with trying when it comes to Starbucks’ Rewards Program. You can read all about the program here. I’ve been a very vocal customer when it comes to their gold card and subsequent gutting of the program.
- Review of the initial $20 Starbucks Gold
- Starbucks removes the $20 barrier to entry for Gold
- Starbucks opens up WiFi to all customers. Value proposition of Gold diminishes
Not a lot has changed since 2010 when Gold became free after a registered Starbucks card was used to make 30 purchases within a calendar year.
This is today’s screen of my Starbucks Rewards status. I don’t live in a city anymore. Heck, until just next week, my nearest Starbucks was 1 hour by car away from where I live and work. We’re getting one in my town next week but, earning 30 stars in a year was actually hard work. It required ravenous, whether I need it or not stops at Starbucks for things like bottle water just to get my stars.
I’ll manage to qualify for Gold in 2013 at some point in September. Last year, I cut it pretty close scoring gold at some point in November. You have to get 30 stars aka 30 transactions to qualify for gold the next year. The funny thing is, your perk for being gold (1 of 3) is that you get a cool gold card. Well, even if your status fails, they don’t take away your gold card. You can still keep it if you’ve already earned it. It just remains a Starbucks gift card with your name on it. Nothing too remarkable and you can work toward gold status for the next year.
The work toward gold status is easy if you hit Starbucks on your commute or stop in every Sunday for coffee with a friend. This is an attainable goal. However, I’m done with shooting for this goal. If it happens, great. If not, I won’t cry about it. The My Starbucks Reserve Gold level is no longer worth anyone’s time. Starbucks has forgotten why they started this program to begin with.
History Lesson:
Starbucks Gold was $20-$25 a year for a black card with a gold star. The card was very sturdy and far nicer than the cards they have now. Wishing I had held onto that card because it was just constructed better and not prone to scratches. It had some great perks like free wi-fi not available to any other Starbucks customers. You were paying for perks unavailable to others and the card garnered a bit more respect from baristas. They knew you were a gold card holder and bent the rules a bit on things like extra shots of espresso and codes to the employee restrooms. It was a Pay-4-VIP card for regulars.
The true reason for gift cards at all and why Starbucks turned “gift” store credits that you gave to friends and coworkers into a card you keep on you and reload is that Starbucks saves insane amounts of money on credit card transactions. Starbucks made the gift card mainstream in the 90s. It was a way to buy a friend a cup of coffee. Starbucks realized that they could sell their regulars on gift cards for regular use. First, they introduced a program where you register a card, use auto-reload and customize the design of it. “Helps you budget your coffee purchases.” The personal reusable gift card was born. By introducing reward tiers for people who carried their own cards, Starbucks accomplished two things:
- Every single customer with a registered card could be tracked. “How do our regulars respond to specials, new drinks and what are their visiting / buying habits?”
- Every time a Starbucks card is used in place of a credit / debit card, Starbucks saves about 2% per transaction. Starbucks wins when you auto-reload for larger amounts. If you put $100 on your gift card for the month, you save Starbucks about $2. Load it up for $20 and you save Starbucks around 50 cents. The figures aren’t exact because each merchant negotiates different terms with credit card companies.
The reason Starbucks can give you a free drink every 15 transactions or free refills of drip coffee and no extra fee for soy is because you’re saving them more by using your credit card and giving Starbucks rights to track your buying habits. They can’t track cash customers but gift cards are easily tracked and, it’s why they encourage you to register your card. Earning rewards requires registration because now those transactions are attached to a your name, address and phone number. It increases the data points in their database of customer info.
Today’s Value Proposition to Starbucks Gift Card Holders:
If I spend $500 per year on Starbucks, I’m only saving them about $10 on fees. That adds up when you think of the millions of annual Starbucks customers who are using registered gift cards. This savings to them and tracking our buying habits allows them some leeway to give us really cool perks. In the past, it was free refills, wi-fi, syrups, soy and free drinks. The current perks for My Starbucks Rewards are outlined on their website.
Green level is secured after 5 transactions on a registered card. That’s very easy to do and you get the free extras, free refills and free coffee when you buy a bag of coffee beans. Getting to 30 stars in a year secures you in Gold for the next calendar year. That level (6 times as hard to reach as green) gets you a free drink every 15 drinks, a free drink on your birthday and a personalized gold card. Starbucks says you get other offers. You don’t. I’ve never received an offer from Starbucks for being a Gold card member.
So, the free birthday and every 15 transactions drink sounds pretty nice. Heavy Starbucks Users could get a free drink once ever 1.5 months if they visit Starbucks every week day. Remember, those are transaction stars, not items. Buy a drink and muffin for you and 4 friends…that’s still 1-star. You’d have to go back again to get a 2nd star that day. I’ve heard of baristas taking the request from gold members and ringing up each item separately but a lot of stores won’t do this. It’s annoying and a waste of time.
Well, on the subject of free drinks, you get that coupon in the mail. I can check my rewards status and pay for drinks via my iPhone app. However, when it comes to a free drink, Starbucks sticks a postcard in the mail. These can get lost or stolen. You don’t need to be the person addressed to redeem it so anyone that sees the big “free drink” postcard can steal it. I’ve had times where I don’t receive my free drink. I’m guessing some sticky fingers stole it. Well, these postcards are not only susceptible to being stolen, but they used to give you a free reign to redeem them. You can wait a month to visit Starbucks and the postcard still works. Not anymore. Now, your free drink on 15 stars or your birthday has to be redeemed within a week. I received my birthday card on August 29th. It was redeemable until September 2nd. I have to drive an hour to a Starbucks just to redeem my card.
Thanks for the free drink, I guess. I’ll have to leave work early one day and drive an hour each way to get the free drink I “earned” on my birthday by visiting your stores as often as I could last year.
So, in short, Starbucks has made perks easier to get at green level and, the gold level rewards…well, one of them is a gold card in the mail with your name on it that you can keep even if gold status lapses and some “special offers” that I have never seen in 3 years as a member and finally, free drinks that require 15 transactions and, even then, only give you ONE WEEK to redeem.
Starbucks’ response to me is probably, “well it’s a free program.” Fine. It’s a free program I won’t try to be in again. I’ll visit Starbucks but if I don’t use my gold card, I won’t worry about it. The incentives you’ve given me are crap. I’m saving Starbucks money each time I use my card and giving them full access to tracking my movements and buying habits. The thanks I get? A Plastic gold card and occasional free drinks that I have to redeem immediately.
Starbucks has gutted the program and abandoned it for their most passionate customers. Count me out from now on.
Starbucks, if you’re reading this, I have some suggestions:
- Reinstate the $25 a year Gold Card Program. Call it platinum card. Let your partners know that these customers LOVE your brand and go out of their way to visit Starbucks. These cards allow for one free drink per month regardless of how many times they visit. This allows a % off on each bag of coffee beans we buy and special treatment like partners are willing to give us bathroom codes, give us a drink first in line if it’s a busy day. Unspoken perks that partners can do optionally that make us feel like a regular no matter which of the 10,000 locations we visit.
- Make Gold easier to reach OR make Green harder to reach. Make Green 15 transactions in a year and Gold is 30 instead of the 5 and 30 it is now. The jump from Green to Gold is insanely hard with the only real deal is a flimsy gold card and a birthday drink.
- Add earned and birthday “free drink” credits to the user’s account. Instead of sending a postcard, my next gold card swipe is a free drink. Alert me on my iPhone via a push notification I earned a free drink and let me redeem it. there or just via a swipe. Free drinks will become a surprise instead of something I have to plan to redeem.
- Extend the free drink deadline to one month. One week is not enough time for users who aren’t hitting Starbucks daily.
- Be very up front about the millions we’re saving you a year in credit card fees by using gift cards. Then, advertise that, because of the savings, you’re passing down perks to us. Customers want to be a part of your success! We want to help. Be more transparent.