Starbucks Rewards Devaluing February 2023

by admin

It’s not just airline frequent flyer programs that are devaluing, but also Starbucks’ loyalty program…

Starbucks rewards changing “stars” requirements

With the Starbucks Rewards program, you earn two “stars” per dollar spent with the coffee retailer. You can then redeem these stars toward drinks, food, and other merchandise. Starbucks Rewards has announced major changes that will go live as of February 13, 2023.

These are the first major changes we’re seeing to the program since April 2019, when the Starbucks Rewards program was totally overhauled.

So, how are redemption costs changing as of February 2023? As before, rewards will range in cost from 25 stars to 400 stars. Here’s what pricing is like with the new program (and then I’ll note whether that represents a change or not):

  • 25 stars will get you a drink customization, like an extra espresso shot, dairy substitute, or a dash of your favorite syrup; this is remaining unchanged
  • 100 stars will get you a brewed coffee, bakery item, or tea; currently this costs 50 stars, so pricing is increasing by 100%
  • 200 stars will get you a handcrafted drink, hot breakfast item, or parfait; currently this costs 150 stars, so pricing is increasing by 33%
  • 300 stars will get you lunch sandwiches, protein boxes, or salads; currently this costs 200 stars, so pricing is increasing by 50%
  • 400 stars will get you select merchandise or at-home coffee; this is remaining unchanged

Fortunately there’s a little bit of good news. Some items will be changing “tiers” for the better:

  • Iced coffee (not cold brew) and iced tea will now be available for 100 stars (the same as hot coffee or hot tea), while previously this cost 150 stars
  • Packaged coffee will decrease in cost from 400 stars to 300 stars
  • Select merchandise (including plastic to-go cups) will decrease in cost from 200 stars to 100 stars

My take on the Starbucks Rewards changes

Usually I cover loyalty program devaluations in the travel space. Admittedly programs like Starbucks Rewards have even wider everyday appeal and use than an airline or hotel loyalty program, though I also fundamentally view these programs to be a bit different.

Why? Well, people regularly open credit cards to earn travel rewards, and can spend years saving up their rewards with a specific aspirational redemption in mind. It’s frustrating when those redemption costs are changed overnight, before people have a chance to redeem.

Meanwhile I view the Starbucks Rewards program more as a “coffee shop punch card program” of sorts. People aren’t generally spending years and putting considerable long-term effort into racking up rewards with Starbucks Rewards. Sure, some redemption values are better than others, but I think most members take an “earn and burn” approach to the program.

With that out of the way, a few thoughts specific to this devaluation:

  • On the plus side, Starbucks is giving several weeks notice of these changes, so most members should have the ability to redeem all of their points before the devaluation kicks in
  • In absolute terms, some of the devaluations here are brutal; increasing costs by 33-10% is a massive price increase
  • This is good news for those who like to redeem for iced coffee, iced tea, or packaged coffee
  • Keep in mind that in 2019 the Starbucks Rewards program was completely overhauled, so I’m guessing the relative valuations here reflect member redemption patterns, and the costs Starbucks incurs
  • It seems that Starbucks Rewards is focused on keeping the redemption values here pretty “round,” or else we might not see such drastic increases

So yeah, this is pretty brutal, especially for coffee and tea redemptions, as well as for hot sandwiches.

Bottom line

Starbucks Rewards changes are coming as of February 13, 2023. With this, we’ll see the number of stars required for most redemptions go up significantly. While some redemption costs aren’t changing, the most popular redemptions are increasing in price by 33-100%. The only good news is that a few items are moving to lower “tiers,” and will therefore be cheaper.

On balance this is a brutal change, if you ask me…

What do you make of these Starbucks Rewards changes?

(Tip of the hat to @NDH330)

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