Starbucks reshaping its loyalty program through prepaid card system

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Starbucks is all set to launch its new loyalty program effective from April this year. The major change which has been implemented in the new loyalty program is the earning of stars. In the old system, the number of stars earned was based on the count of transactions of a customer. In the new system, the stars would be awarded based on the amount spent at each transaction. Another significant aspect of the loyalty program is that, the prepaid card system will be launched by the end of 2016, which would function like a Visa Card and would be acceptable at other retail outlets too. The reward point structure on the card usage outside of Starbucks has yet not been structured, but it will soon be in place.

According to the old loyalty program of Starbucks, each transaction earned customers a star. This resulted in rewards in terms of a free coffee or snack after 12 visits with spending as less than $2. It took 12 stars to reach the Gold status. This also resulted in the increasing trend of splitting the bill. However, according to the new loyalty program, customers will be awarded reward points based on the expenditure amount. Starting from April 12, customers will be awarded two stars per dollar spent at Starbucks. Also under the new program, it will take 125 stars to reach the Gold status. The company has announced that at the launch of the new loyalty program, existing customers will benefit from the program, as their reward points will be multiplied by 11. This step is expected to increase the acceptance of the new scheme among present customers.

The brand has stated that the new program was launched after going through the customer feedback and suggestions on the “My Starbucks Idea” program. On the Starbucks Rewards Prepaid Card front, the company has partnered with Chase for the launch, later this year. This reloadable card could be used for purchases even outside Starbucks outlet with Visa Card acceptance.

Another interesting thing to note is there is no service charge or charge of loading money in this prepaid card. However, it might attract foreign transaction charges in case or lose or replacement. The card can be applied using the Starbucks mobile app or through company website. The reward point earning system on usage of this card against other retail outlets has yet not been declared by the brand. It can be presumed similar to other cards. It might be a point for a dollar spent in some cases or three or four times over, with a merchant.

Starbucks, the brand which bases its business mainly on coffee sales, expects that the new program will aid the better store functionality in the long run. It is also expected to increase the other food item sales among people in order to earn extra reward points. The Prepaid Card system is also expected to draw in customers from the young age group.