Starbucks Rewards Devaluing February 2023

Frequent flyer programs are not the only ones that are devaluing.

Starbucks rewards changing “stars” requirements

Starbucks rewards program gives you two stars for every dollar you spend. You can redeem them for drinks, food, and other items. There will be major changes to Starbucks rewards as of February 13,23.

The Starbucks rewards program was completely overhauled in April of 2019.

How are redemption costs changing in 2 years? Reward costs will range from 25 stars to 400 stars. This is what pricing is like with the new program.

• 25 stars will get you a drink customization, like an extra espresso shot, dairy substitute, or a dash of your favorite syrup; this is remaining unchanged
• 100 stars will get you a brewed coffee, bakery item, or tea; currently this costs 50 stars, so pricing is increasing by 100%
• 200 stars will get you a handcrafted drink, hot breakfast item, or parfait; currently this costs 150 stars, so pricing is increasing by 33%
• 300 stars will get you lunch sandwiches, protein boxes, or salads; currently this costs 200 stars, so pricing is increasing by 50%
• 400 stars will get you select merchandise or at-home coffee; this is remaining unchanged

There is at least a small amount of good news. Some items will be changed for the better.

• Iced coffee (not cold brew) and iced tea will now be available for 100 stars (the same as hot coffee or hot tea), while previously this cost 150 stars
• Packaged coffee will decrease in cost from 400 stars to 300 stars
• Select merchandise (including plastic to-go cups) will decrease in cost from 200 stars to 100 stars

My take on the Starbucks Rewards changes

In the travel space, loyalty program devaluations are usually covered by me. Starbucks rewards have a wider appeal and use than an airline or hotel loyalty program, but they're a bit different.

What's the reason? People frequently open credit cards to earn travel rewards and can spend years saving up their rewards with a specific redemption in mind. People have a chance to redeem before the redemption costs are changed.

The Starbucks rewards program is more of a coffee shop punch card program. People don't spend a lot of time trying to rack up rewards with Starbucks. Most members take an "earn and burn" approach to the program, even though some redemption values are better than others.

There are a few thoughts related to this devaluation.

• On the plus side, Starbucks is giving several weeks notice of these changes, so most members should have the ability to redeem all of their points before the devaluation kicks in
• In absolute terms, some of the devaluations here are brutal; increasing costs by 33-10% is a massive price increase
• This is good news for those who like to redeem for iced coffee, iced tea, or packaged coffee
• Keep in mind that in 2019 the Starbucks Rewards program was completely overhauled, so I’m guessing the relative valuations here reflect member redemption patterns, and the costs Starbucks incurs
• It seems that Starbucks Rewards is focused on keeping the redemption values here pretty “round,” or else we might not see such drastic increases

This is brutal for coffee and tea redemptions and hot sandwiches.

Bottom line

Starbucks will change its rewards program on February 13, 2023. The number of stars required for most redemptions will increase. The most popular redemptions are increasing in price by more than 100 percent. Some items will be cheaper because they are moving to lower tiers.

I think this is a brutal change.

What do you think about Starbucks rewards?

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