Another Rewards Program Goes Revenue-Based

In the Miles and Points community, the term “revenue-based” is not something that’s looked upon very highly.

It wasn’t too long ago that frequent flyer programs rewarded their members with mileage equivalent to the miles that were actually flown.  If you were to fly 5,000 miles, you received 5,000 miles in your frequent flyer account (with some additions based on status level, promotions, etc.).  Now, with most airlines transitioning to revenue-based rewards programs, if you fly 5,000 miles, the amount of miles deposited into your frequent flyer account is based on the price of your ticket multiplied by an airline’s pre-determined formula.  Needless to say, for the most part, the amount of miles earned per flight is less than it used to be.

It now appears, from a “leaked” brochure (the story about which was first seen on the Consumerist’s website) that the Starbucks Rewards program will be going revenue-based.

The current program rewards customers, who are members of the program, with 1 star per transaction.

According to the brochure, the new program will change the rewards structure to providing 2 stars per $1 spent.  Which sounds good, until you dig a little deeper.

The current program provides a free drink (or food item) after earning 12 stars.

 

 

 

The new program provides a free drink (or food item) after earning 125 stars.

If you’re spending a lot on your morning pick-me-up (ordering lattes rather than regular coffees, or large orders rather than a single cup) then this change might not have as big an effect on your free-drink earning.

But if you’re used to spending a couple bucks for a black coffee, then you’re definitely going to get penalized by this new Starbucks Rewards program.

Ahhhh, that revenue-based bug bites again.  Thanks, Starbucks.