Starbucks reveals the real reason for the rewards change that outraged customers
Suzanne Plunkett/ Reuters
Suzanne Plunkett/ Reuters
The coffee chain is majorly expanding its rewards program, with an upcoming Visa debit card that allows customers to earn rewards points, or 'stars,' towards free coffee, food, and an increasing number of other perks every time they use the card.
"Every time you use this card, you will automatically earn rewards. Stars will automatically deposit right into your account," Starbucks COO Kevin Johnson said at Starbucks annual meeting on Wednesday. "This is just the beginning."
The Starbucks Rewards Debit Card, created in partnership with JPMorgan Chase, will be prepaid, reloadable, and accepted everywhere Visa credit cards are accepted. The company plans to make the card available by the end of this year.
The debit card is part of a wider mission to expand Starbucks' rewards program.
"We're bringing customers to the world of stars everywhere," says Johnson.
The company is announcing new ways to cash in rewards with partnerships with other companies. For example, Starbucks Rewards members can connect their accounts to their New York Times subscriptions, earning stars for subscribing to the newspaper.
Starbucks announced in late February that, starting in April, the chain would award stars based on dollars spent, instead of visits to the coffee chain.
Starbucks customers immediately reacted negatively, with public sentiment dropping 50% in eight days following the announcement.
Despite the vocal naysayers, Johnson said that loyalty program signups accelerated following the announcement of the changes.
With the upcoming debit card, it's clear that Starbucks had reasons for changing its rewards program beyond attempting to be "fair" by rewarding customers on a per-dollar basis. With plans to allow customers to earn stars at any store or ecommerce site that accepts Visa, offering rewards on a per visit basis would be impossible.
Starbucks wants its rewards program to touch every aspect of consumers' lives, with the new debit card becoming customers' "primary card." With 12.1 million active Starbucks rewards customers, that's a lot of users who may soon be linking all of their financial decisions to free lattes.
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