Starbucks learns from the airlines: "enhances" Starbucks rewards

I used to use my Starbucks red card about twice a month until Chase "enhanced" their Freedom card and gave me the 10/10/10 option, which is essentially $0.10+1.1% per purchase. So now, I just use that card instead, as my purchases are usually around 2.50, so I get 5% cash back.

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Hey, was looking at the new Starbucks rewards program (which starts 12/26)... it looks like you earn points for each "use" of the card, and there are tiers at 5 stars and 30 stars.

Here's what I was wondering-- is there a minimum purchase for a "use"? Couldn't we find the cheapest thing at Starbucks and make a lot of purchases on the card for that? I don't need to buy at $4.37 latte each time, do I?

By now, everyone enrolled in the Rewards program should have gotten an e-mail with the subject "MY Starbucks Rewards begins today."

While trying to wade through the gibberish in it as well as the website's FAQ Page on the new system, I decided to call and get a few questions straightened out.

As annoying and offensive as the Gold Card program was ($25 charge for a loyalty program but 10% discount), this makes it far worse.

Say you are already at the Gold level, you will be automatically made Gold in Rewards on the anniversary date of your card (not for a good few months for me). Then, you will earn one free beverage per 15 "stars." You earn one star per use. What is a "use?" Here's where it get's interesting.

Unlike with the Gold Card where you could pay with your own (non-Starbucks) credit card or cash, with the new Rewards program, you only accumulate "stars" when you pay with a Starbucks card. Personally, I have no intention of advancing interest-free loans to Starbucks by adding money to my Rewards card and then leaving it there. You may disagree.

You get one star per purchase regardless of what you buy or how much you spend.

So for example, the following will each earn one star although they are different quantities and prices:

• One short cup of Pike Place;
  
• Two Venti lattes;
  
• One 18-cup Coffee Traveler;
  
• One dozen cups of coffee (say you're paying for a group or your office mates).
  

The customer service representative to whom I spoke acknowledged that people will likely game the system by doing the following:

1. If you know the exact amount of your purchase (as long as it's at least $5), you could add the amount to you Rewards Card via credit card, pay for the purchase, and zero balance the card;

2. If you are buying more than one cup of coffee, you can pay for each separately thus gaining a "star" for each.

The rep acknowledged that this will cause extra work for baristas, but Starbucks made the rules.

What happens if the total is $2.50 and your rewards card only has $2.00 on it?

Just found this close to the bottom of the FAQ Page


Wow! I would have thought the program was designed to reward customers period.

Can you imagine AA, for example, deciding that the AAdvantage Program "is designed to reward our many customers who use and pay with an American Airlines Credit Card?"

Brilliant. So I'll add a dollar everyday and force starbucks to run two cards for each of my transactions.

They made an announcement on their Facebook page.,

From the comment section, there seem to be a lot of people unhappy with the change.

You have to add a minimum of $5. . .but you can charge it to your AAdvantage Mastercard.

So what's the scam here, they're hoping people don't use the money they put on the card?

Interest-free loans? Ever hear of the term "float?" Could this be one?

Maybe, but presumably there will be high volatility and lots of credit card service charges, no?

Indeed. I still don't understand their decision.

fwiw I don't know if it's a "secret agenda" (we'll get lots of people to deposit money and then hope they don't spend it!) as much as just what it appears on the surface: a way to build brand loyalty and a way to get people to spend with their starbucks card (so it's an easier transaction, can be tracked, and is intangible, unlike cash). not that the $ value all the cards hold won't be bad, but I don't think there's nefarious, "the *real* purpose of doing this is..." going on here.

the rules are still awfully restrictive, though :-(