Who does your incentive program benefit and is it clear?

Some of you know I have a bit of a Starbucks addiction. (I’m even the mayor of several Starbucks on Foursquare).

I was never a fan of paying to join member rewards programs, but last year I talked myself into buying the Starbucks Gold card.  By swiping the card at the register with each purchase, I’d get 10% off.  We even bought two for the family.  I’ve always viewed it as a psychological benefit – every time I made a purchase I would see the amount I had to pay go down.  It would make me feel like I was saving money and that made my daily stops ok.

Then Starbucks introduced their new My Starbucks Rewards program.  They took away paid memberships, instead offering a program where if you keep a balance on your card and pay with it each time, you can earn a free drink after 15 purchases.  There are other benefits like free syrups and soy milk, but those don’t really interest me since I get the same drink every time and don’t need them.

There’s been a lot of confusion around the new program.  I’ve even had some store managers tell me

that I can use the new card without maintaining a balance (similar to the old program.)  I’ve tested and this isn’t the case, either you pay with the card or you get nothing.  So I took a look at their FAQ to try and understand why they made these changes and what it really means.

Why is the program changing?

• Be free at all levels – with no membership fee, it enables more customers to participate.
• Be one simple program that is easy to understand and use.
• Provide tiered rewards – once you achieve Gold level, you will still continue to enjoy the benefits offered at the Welcome and Green levels.
• Recognize and reward our best customers based on frequent, personalized rewards including free drinks.

I read this as, we’re taking away the good high end benefits so we can reach more customers.  You now earn stars for each transaction, not the amount spent or even number of items purchased.  Once you earn enough points for a free drink you are sent a postcard in the mail that you need to bring to the store to claim your free drink.

Why do I have to pay with my Starbucks Card to participate in the program?
The program is designed to reward our many customers who use and pay with a Starbucks Card.

Even their FAQ doesn’t actually give a reason why you have to pay using a Starbucks Card.  Unfortunately they haven’t convinced me there’s enough benefit to bank my money with my new Starbucks-only debit card, earning no interest (which is what I’d be doing by carrying a balance.)  I’d be earning a free drink for every 15 purchases — only a 0.06% return if I’m just buying one beverage each time, even less if I stop to pickup a bag of coffee.

I’m convinced the program changes benefit Starbucks more than the customer.  It’s unfortunate they took a program that had a very clear benefit for loyal customers who actually paid to join (the 10% off applied to buying coffee beans as well) and replaced it with something apparently designed to save money for the company.  Loyal customers who spent money to be members in the old program are now freely enrolled in a program that offers very little.

There’s been a lot of positive communications sent to me from Starbucks about this change, unfortunately bright colored emails and postcards aren’t going to make me forget that I just lost my 10% off benefit. And it seems I’m not the only one with these feelings:

• New Starbucks Gold Card Sucks! (on Starbucks Facebook page)
• New Gold Card – No 10% (on Starbucks Facebook page)
• Starbucks Revolt
• Starbucks Gold Card Fault
• Don’t kill the 10% discount Gold Card.

From what I’ve seen, Starbucks has chosen to not respond to their upset customers.

I have my new card, but no plans to use it.  Instead of sitting in a prime spot in my wallet like the old card, it’s gathering dust on a counter at home.