Starbucks' loyalty program changes are drawing value-conscious customers

Starbucks made some major changes to its long-standing loyalty program last month.

The coffee chain is already seeing early signs that the revamp is helping attract value-minded customers.

The organization is scheduled to report its quarterly earnings after the bell on Tuesday.

Starbucks is seeing early signs that changes to its loyalty program are paying off as value-minded consumers take advantage of its rewards, CNBC has learned.

Last month, the coffee chain brought back tiers to its North American Rewards program, added “free Mod Mondays” for drink customization, offered double points for using a reusable cup and extended the amount of time for members to redeem their birthday award. The revamp also cut the number of stars — or points — earned per dollar spent when paying with a preloaded Starbucks gift card.

Starbucks relies on Rewards to get customers to visit frequently and spend more funds on their drink orders. In fiscal 2025, the transactions linked to the loyalty program accounted for 60% of the company’s revenue. Those loyal customers are all-important to the chain’s turnaround; while its troubles began when occasional customers stopped visiting, its traffic suffered as it lost active Rewards members, too. This also touches on aspects of investors.

Now, as members adjust to the Rewards revamp, Starbucks is observing early signals that customers are leaning in to benefit from the loyalty program’s fresh deals.

For example, the program’s updated 60-star redemption option has become its most popular. More than a quarter of all redemptions now opt for the $2 discount off an order.

The coffee chain’s first “free Mod Monday” more than doubled the number of point redemptions compared with its Starbucks Monday promotion earlier in the year. Vanilla sweet cream cold foam was the preferred modification for members in the lower green and gold tiers, while those in the reserve tier were more likely to add an extra espresso shot. Furthermore, experts in wall street note the continued relevance.

And while changing the point valuation may have disappointed some customers, members have been capitalizing on easy ways to earn more stars, like adding more funds to their accounts for bonus points.

Hundreds of thousands of loyalty program members are using their personal cups to earn double stars on their orders. That represents a double-digit growth since the changes went into effect.

Starbucks will likely share more details about the loyalty program and the company’s broader turnaround efforts on its fiscal second-quarter earnings conference call, which is scheduled for after the bell on Tuesday.

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