Starbucks implemented significant changes last month to its long-standing customer rewards points system. The coffee chain is already seeing positive initial results, with the updated program attracting more value-oriented customers. The company is scheduled to release its quarterly earnings report after the market closes on Tuesday.
Starbucks is advancing a comprehensive transformation plan led by CEO Brian Niccol, which includes store closures, a reduction of 900 jobs, and a $1 billion investment in restructuring. The revisions to the Starbucks Rewards program are proving effective, with a growing number of cost-sensitive consumers actively utilizing member benefits. Last month, Starbucks made several adjustments to its North American loyalty program: it reinstated a tiered membership system, launched a "Free Customization Monday" promotion, offered double stars for orders placed with a personal reusable cup, and extended the redemption period for birthday rewards. Concurrently, new rules reduced the number of stars earned per dollar spent when using a pre-loaded Starbucks Card.
Starbucks relies heavily on its loyalty program to increase customer frequency and spending per visit. In the 2025 fiscal year, transactions by members accounted for 60% of the company's total revenue. Loyal customers are a crucial pillar for the brand's transformation; the company had previously faced operational pressure from a decline in non-member customer traffic, which was further exacerbated by a drop in the number of active rewards members. As members adapt to the new points structure, Starbucks is observing several positive indicators, showing that consumers are proactively taking advantage of the new benefits. For instance, the newly introduced option to redeem 60 stars for a $2 discount has become a popular choice, currently accounting for over a quarter of all star redemptions. During the first "Free Customization Monday" event, star redemptions doubled compared to typical Mondays earlier this year; regular Green-level members favored free additions like vanilla sweet cream cold foam, while premium Reserve members more frequently added an extra shot of espresso. Although the reduction in points value for some transactions dissatisfied some customers, members are finding simpler ways to earn more stars, such as by loading money onto their account to receive bonus points. Hundreds of thousands of members have now earned double stars by bringing their own cup, with the adoption rate for this behavior seeing a double-digit percentage increase since the new rules took effect. Starbucks will release its fiscal second-quarter 2026 earnings after the close of trading on Tuesday. Subsequent management commentary is expected to provide detailed data on the loyalty program's performance and the overall progress of the strategic transformation.
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