Starting on April 12, Starbucks is hoping to boost its following of loyal customers by doling out rewards based on dollars spent rather than number of visits.
Customers in the U.S., Canada and Puerto Rico will earn two stars for every $1 spent, rather than one star per visit under the current program. The change has been the number one requested update to the company's rewards program, executives said previously.
Right now, customers have to visit 12 times to earn a free food or drink item. Under the new program, customers will have to earn 125 stars to get a free reward.
The goal is to get more people to sign up for the loyalty program — currently there are more than 11 million active members — and ultimately increase store sales and profit.
"We believe that customers, because they earn more they’ll spend more," Scott Maw, chief financial officer for Starbucks, said. Starbucks loyalty members already spend three times as much as nonmembers and visit more frequently. But the coffee company says that fewer than one in six of its more than 75 million monthly visitors are loyalty members, pointing to the potential to attract more customers to the program.
The company is also hoping the change will help avoid a common practice in stores today referred to as transaction splitting, where customers ask baristas to ring up multiple items separately in order to get more star rewards. Starbucks estimates about 1% of all transactions are from customers who request their orders be rung up individually, slowing down traffic in stores.
Customers will still be able to earn stars on Starbucks grocery purchases too, but the number of stars rewarded will correlate with the retail price.
