Cash Smarter

February 22, 2016  by: Aaron Crowe

Starbucks Makes it Harder to Get Free Coffee

Starbucks Makes it Harder to Get Free Coffee

Starbucks rewards members will have to do a little math to figure out if they get a free cup of coffee at the chain, which is a difficult thing to ask anyone before they’ve had their morning cup of coffee.

The new rewards program will be based on dollars spent instead of the number of visits.

Your morning math problem at the coffee counter just got more complicated, and will probably cost you more money to earn a free cup of joe.

Starting in April, customers will earn two reward points toward a free drink for every dollar spent and requiring 125 stars for a freebie, replacing the current method of earning points for every purchase and requiring 12 stars for a free drink.

Instead of the simple math of: 12 store visits = free coffee, the new equation is:

When 2 Stars X $1 = 125 Stars, then = free coffee

Or to put it into English, since our math skills aren’t too keen in the morning: You earn two stars for every $1 spent, and when you collect 125 stars, you get a free treat. That free drink will cost $62.50 in spending.

This overhaul of the “Starbucks Rewards” program — which the company says one customer in six is a member of — is meant to award stars, or points, “based on what you buy, no matter how often you visit,” according to an email I received as a rewards member.

$14.50 more for a free Starbucks drink

Starbucks says the new program will still reward people for about the same amount of money spent as the old program.

Do some simple math and you’ll find they’re wrong. The new Starbucks program reminds us of the old rewards program at Southwest Airlines, which used to give a free flight after buying 12 flights, no matter how far or how much the trip cost. The goal, Southwest said, was to reward people who spent more money. We just found it to be confusing and a lot more difficult to rack up a free flight.

But back to the Starbucks math. Under the existing program, if the average purchase is $5, as Starbucks says it is, then 12 transactions equals $60 for a free drink.

Collecting 125 stars under the new program costs $62.50. Or, $62.50 X 2 stars = 125 stars, because every $1 spent earns two stars.

That’s only $2.50 more for a free drink under the new program, if you believe that the average purchase is $5. But as someone who only spends $4 per purchase on a drink, and sometimes even only $3, my cost is lower.

$4 X 12 = $48 under the old program, meaning I spent $48 for a free drink after 12 visits. Under the new program, I’ll need to spend $14.50 more for a free drink.

At $3 per visit, my free drink only costs $36 under the old program. The new rewards program will cost me $26.50 to get a freebie.

The chain is increasing the ways customers can earn rewards. There will be monthly “Double-Star Days,” and buying from Starbucks at a grocery store or a drink at its tea chain Teavana will earn stars.

Those greedy 1 percenters

In its email to rewards members, Starbucks says the top request it received from rewards members was to give them stars based on how much money they spent, not the number of transactions.

For people who spend a lot of money at Starbucks, that makes some sense. But what’s really behind that request, if it really was a request from customers, is a way to speed up the notoriously slow checkout lines at Starbucks.

There’s always someone in the line taking up too much time by ordering everything on the menu in every imaginable form, right? What Starbucks has found, according to a Fortune story, is that 1 percent of total Starbucks transactions are from rewards members clogging up the line by asking for separate transactions on each purchase so they can earn more stars.

Instead of buying their coffee, sandwich, muffin and iced tea in one order, those 1 percenters are asking the cashier to ring up four separate transactions so they can accrue four separate stars instead of one star for their entire order.

My oh my, the steps people will go to get a free cup of coffee that costs pennies to make. Can’t they just be sent home to make their own coffee?

0 likes Personal Finance # , ,
Get The E-Book
learn to
be the
go-to
expert in
your field
Fill out the form below to get the book FREE as well as updates from CashSmarter.com.

Recommended by MyFinance

Share: / / /

2 thoughts on “Starbucks Makes it Harder to Get Free Coffee

  1. Anne says:

    People get multiple transactions? I guess that makes sense though. I never go to Starbucks anymore (there wasn’t one where I live until about a year ago), so I don’t know these things. Facebook is all aflutter, though!

    1. Aaron Crowe says:

      I thought that part was crazy also. Ring up three separate transactions so you can earn two more reward points? I was amazed people were doing that. I guess not even their time is worth money.

Comments are closed.