Though the Starbucks Rewards program started in 2008, it still has an old-time feel.
It was designed, back in the day, as a modern, digital version of the original customer punch cards of the 1980s and 1990s.
The program has evolved quite a bit over the years but the concept has always been for frequent customers to earn stars and redeem them for various discounts and freebies.
Anyone who connects purchases to a Starbucks app will earn one star for every dollar spent. One can redeem 25 stars for a shot of espresso or syrup, 50 stars for a hot coffee or small bakery item, 150 for a handcrafted drink, like a Frappuccino or Refresher, or a hot breakfast item, and 200 for a larger food item. And 400 stars get select coffee mixes and merchandise.
Those members who earn 300 stars in a 12-month period get promoted to gold status, which then speeds up rewards collecting.
What's Getting More Expensive?
But while spending $200 for that free salad will take some time, the 50-star reward was a popular way that many Starbucks aficionados regularly got a free morning tea or coffee.
But that's about to double: From Feb. 13 onward a hot tea, coffee or baked item will require customers to spend 100 points.
As a leaked Starbucks memo sent to Business Insider shows, hot drinks will get more expensive (for those shopping in stars)
Iced coffee and tea will be bumped down to the same 100-star price from the 150-point handcrafted-drinks category. And certain types of packaged coffee move to the 200-star tier from 300.
Most other changes are going to require customers to spend more points. Hot breakfast sandwiches will go to 200 stars from 150 while sandwiches and salads will now cost 300 stars instead of 200.
The 25-point espresso- and syrup-shot perk remains unchanged as does the top 400-star tier for a Starbucks cup or tumbler.
The changes, according to the memo, are necessary to ensure the "health of the program and meet the evolving needs of our customers."
In corporate speak, "program health" nearly always means cost-cutting and this is what's happening with Starbucks Rewards.
A Starbucks representative confirmed the changes to TheStreet.
"We occasionally need to make changes to ensure the long-term sustainability of the Starbucks Rewards program and to meet the changing needs of our members," a representative said.
Starbucks Traffic Holding Up vs. Peers
The changes come when the rising cost of food is pushing many customers to reconsider frequent visits to the coffee shop and look for various discounts, freebies and rewards when they do go out.
According to foot-traffic numbers from Placer.ai, more than 16,000 Starbucks stores across the country saw a visitor decline of more than 8% in October from the year-earlier month.
On the other hand, Starbucks is still doing better than most, at a time when coffee-bar visits are increasingly being seen as a luxury that can be cut when times get tough. Competitor Dunkin' saw a decline of more than 12% in the same time period.
Starbucks "will look to build on a community-centric model to add locations that focus more on convenience and getting drinks into people’s hands quickly, hoping to convert its unique visitors into regulars," Placer writes in the report.
