Scatterlings: Starbucks' bait and switch clobbers its most loyal customers where it hurts the worst

I like Starbucks coffee. I don’t love it, and I’m not crazy about the prices, and sometimes the barista standards slip a bit, what with the relatively fast staff turnarounds…

Overall, though, I like it. And, truth be known, I am a bit of a caffiend. If there were a Continental Coffee or an Abruzzo Cappuccino or a Joe’s Cafe or even a J J Bean or Caffé Artigiano near work, I would be lining up there every morning.

But, essentially, the three blocks on West Broadway from Granville to Burrard contain a Blenz, a Tim Hortons, and a Starbucks, and that last one is right across the street.

Starbucks has experimented a fair bit over the years with “loyalty” or “rewards” incentives to try to both maintain and boost market share. Some of them have been good (free refills on brewed coffee, discounts, etcetera), but some of the tweaks to the programs haven’t been so good.

Especially the latest, billed by Starbucks in an emailed news release, somewhat misleadingly, as “Rewards are coming to you faster”.

A few years ago, you used to be able to buy a Starbucks “gold card” for $25 (as opposed to the regular “loadable” cards). That entitled you to, among other perks, a 10% discount on purchases and free flavoured syrups and soymilk, for which the chain normally charged extra. If you drank a lot of Starbucks coffee, that in itself was a considerable savings over the course of a year and more than paid for the cost of the gold card.

That discount was yanked on Boxing Day 2009 in favour of the “My Starbucks Rewards” program. With this, if you registered your in-house loadable card online, you were issued a personalized gold card after 30 drink purchases, the free-flavoured-syrups and soy benefit continued (valuable if you, like myself, enjoy an occasional vanilla latte), and after every 15 drinks you received a free one.

That worked out to only about a seven-percent discount, compared to the 10-percent previously, and you actually had to purchase (including the first 30 to become eligible) 45 drinks to start receiving the free ones.

A bit of a bait and switch, really, but no one was forcing you to continue or jump in.

However, that’s about when I bought in, basically, because soon after that, the Seattle-based chain also announced an across-the-board price hike. Not huge, but enough to make me consider shifting to another java supplier or cutting back my intake.

I realized that I could negate the increase by receiving the gratis vanilla syrup (50 cents) in my lattes and getting a freebie after every 15th buy.

Now, with its latest changes, the incentive bait and switch becomes even clearer. Effective October 16, 2012, the free syrups and soy are cut off. Also gone is the free drink when you bought a pound of the whole-bean coffee.

But the chain is trumpeting “Hello, faster rewards” in its bumf for this latest cash grab, focusing on the fact that the free drink now comes after just 12 purchases, instead of 15.

Big hairy deal. Like Bill Clinton says, do the math.

If you are a gold-card customer and you buy a venti-sized vanilla latte once a day, five days per week, that’s an annual outlay of $1,237.60. After October 16, that will cost you $1,383.20.

The “Hello, faster rewards” just cost you $145.60.

And as far as the “faster” part goes, your freebie every 15 drinks used to get you approximately 17 bonus drinks per year (based on one latte per day, five per week); the increased frequency (at the same purchase rate) nets you 21 of those annually. That’s a $21.28 bonus, so even with that subtracted from your new, improved yearly cost, this latest example of greedy grabbing will still cost you an extra $124.32.

That’s rewarding loyalty?

No, it’s a price increase disguised as an incentive, and the chain is taking it out of the hides of its most loyal customers.

I’m hoping—no, betting—that this has a negative impact on Starbucks’ bottom line. Why am I so sure? Because I’m definitely cutting back my purchases there from now on, and if a coffee freak like myself is considering this, there must be many others doing the same.

Hello, Tim Hortons?

Comments (13) Add New Comment
Maya Beckersmith
Grrr! The syrup 'n soy perks are the only reason I even have a Starbucks card! Back to office coffee in the afternoon, I guess.
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coffee


It didn't seem like that big of a deal when I was younger. But now seeing how costs really effect me in a year, I drink small cup with breakfast and grab another cup for work. I buy cheaper brand coffee beans and it usually last me bit over a month.
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David H
Boo hoo. Starbucks is only good for free ice water, napkins and washrooms to shave in
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Martin Dunphy
David H:

I'm so sorry. I had no idea.
I'm there for you.
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DavidH
@ Martin Dunphy: Please note that "David H" (him) is not the authentic and irrascible "DavidH" (me). One small space defines the difference between us.

That said, David (space) H is not wrong. But I would remind him that McDonald's also offers free water, napkins, and washrooms to shave in. As well as free newspapers (sadly, not the Georgia Straight) and cheap but remarkably tasty coffee.

Regards,
David (no space) H



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suck it
I never really drank there much to begin with but not that they are pulling this scam I mwill be sure to give all of my money to timmys.screw you starbucks the only thing your good for is your punpkin scones
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prenup
Im done with starbucks. Not because of hippie reasons like "hate all big brands", or because its "cool not to like the popular guys", or because I dont like the coffee ( I always preferred it). I done because they have gotten greedy and cheap (in the sense they no longer offer any real loyalty or thanks). I remember when you would get a free coffee if you bought a travel mug from them. Now, no more. Really how much does a coffee cost them?! i fyou pay $15-$20 bucks for a mug they cant afford to throw in a 4 cent coffee?

I felt even thou they were big, they made the stores feel "local" by selling good product besides coffee, and offer nice unexpected loyalties like free refills etc etc.

The food sux too...
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Martin Dunphy
DavidH:

You think I was taken in by that old "extra space" trick? Ha!
Besides, I know that if you ever wanted any ice water you could just tap a vein.
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cathy
Starbucks and all the coffee outlets, food carts etc just create a lot of garbage. We all can save a lot of $$ by bringing our reusable mugs from home filled with fair trade/organic coffee with whatever you like in it. Don't have time you say? How long do you spend in coffee line ups? Oh and whatever happened to thermos's? Just got a great glass lined thermos from the thrift store for $1-keeps stew/soup etc hot for about 8 hrs-who needs a food cart?
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no bucks
I used to go to Starbucks two or three times a day, then a few years ago, they stopped giving you a free coffee when you bought a beverage container. I thought how cheap of them, so that was the beginning of the end for me. Now I might purchase a coffee from them once every 4 to 6 weeks because every time I do, I leave feeling ripped-off because of high the prices, and their coffee isn't any better than a lot of other coffee houses.
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Samuel Galbrith
That's not what a bait and switch is. Bait and switch is getting a buyer into the store with one offer and then saying it's no longer available and trying to sell something else. Here Starbucks is changing their loyalty program after more than a year of offering it. It's called change and it happens all the time. And now you, as a customer, get to decide whether to keep going there or take your business somewhere else. I do find all the drama amusing though.
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Martin Dunphy
Samuel:

Thanks for the input, but not sure where you are coming from. Are you a literalist or something?
Fair enough, if so, but it is a bait and switch. They got people in through the freebies, waited until they got "loyal", then took them away.
Now it costs more, ergo: more expensive.
Seems pretty simple to me.
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Olivia Wu
Every thought to give "Dose Espresso Bar" a try? 1517 Broadway right beside Granville Street. Definately better than Starbucks!
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