The Starbucks (NASDAQ:SBUX) Rewards loyalty program offers free drinks along with other perks to members. It's free to join, lets members get a free beverage on their birthdays, promotes members events and special deals, allows for free in-store refills (of basic coffee or tea), and gives users the ability to earn rewards "stars" toward free drinks.
For most people -- as long as they visit Starbucks at least a couple of times a month -- the program is definitely worth it. Even if you never reach the Gold-level status (which comes with some added perks), it's probably a thrifty idea for most people to join. But there are some exceptions.
How does it work?
You can join Starbucks Rewards either by downloading the company's app and registering or by attaching your registration to a gift card or a digital facsimile of one. You don't need to spend any money to join and once you register you immediately have "Green" status with the following perks:
- Two Stars earned per $1 spent.
- A free drink or food item on your birthday (it expires 24 hours after the actual day).
- The ability to pay using your phone (either with a gift card balance or by making account deposits via an attached credit card).
- Access to the company's mobile order and pay service.
- Free in-store refills (no matter what you ordered originally, refills are basic coffee or tea and they must be obtained during a single visit where you made a purchase through the app or on a connected card).
- Access to members-only events and promotions.
Once a customer earns 300 stars ($150 spent) he or she obtains "Gold" status. That comes with an additional set of perks.
- Monthly days where Gold members earn double the Stars.
- A personalized "Gold" membership card.
- A free drink or beverage with every 125 stars earned ($62.25 spent).
To maintain a Gold membership, the member must earn at least 300 stars in the 12 months after he or she obtained that status.
Check out the latest Starbucks earnings call transcript.
Who shouldn't bother joining Starbucks Rewards?
Very casual visitors who would not go out of their way to claim a free birthday drink or who never sit around to claim a free refill probably don't need to join. That's even more true if you won't spend the $150 in a year to earn Gold status and begin accruing stars toward free drinks. And, of course, customers that visit that rarely probably won't want to go through the trouble of registering just to get mobile ordering and payment.
Users who visit more often but don't use any of the Green level perks should join if they will not only spend the $150 it takes to earn Green status but also an added $62.50 to earn at least one free drink or food item. Stars reset after a customer hits the Green level so it actually takes $212.50 spent to earn the free reward.
It's actually even more complicated than that since Stars expire after six months. You really need to spend $150 within 12 months to earn a year of Gold and then a least $62.50 per six months to get a free drink. And, to confuse things even more, maintaining Gold status requires earning 300 stars a year. This means you can argue that joining makes sense for someone who will spend at least $150 per year at Starbucks, spread out pretty evenly so at least two free drinks can be earned each year.
Why go for the Gold?
The good news is that it's not hard to join. If there's any chance you might use any of the Green perks or might spend enough to hit Gold, then it's probably worth the effort to sign up. Starbucks Rewards is a fairly generous, no-cost loyalty program, but it only makes sense to join if you're going to use the lower-tier perks or plan to spend enough to hit Gold status.