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Starbucks shakes up rewards program in 2023, making it harder to score 'free' drinks

Starbucks is updating its reward program, making it tougher for customers to score freebies with "stars," or points, in 2023.

Why the change? Starbucks told Yahoo Finance, "We occasionally need to make changes to ensure the long-term sustainability of the Starbucks Rewards program and to meet the changing needs of our members."

Effective February 13, reward members will need 100 stars, up from 50, to get a free hot or iced coffee, tea, bakery item, packaged snack or a plastic to-go cup. Previously, iced coffee or tea was not included in this level.

The next tier is 200 stars, formerly 150, to score a handcrafted beverage like a latte, Frappuccino, or any hot breakfast item. To round out the updates, 300-star customers can get a packaged salad, lunch sandwich, or protein box. The 300-star tier will also include packaged coffee (a bag of whole beans to make at home), which was previously 400 stars.

This is the first structural change for members since 2019.

'Untapped opportunities' to grow the rewards program

The changes come after the company said earlier this year that it had raised prices by about 5% over a 12-month period. Interim CEO Howard Schultz said in the fiscal-fourth quarter earnings call in early November, "Our convenience channels, drive-thru, Mobile Order & Pay, and delivery drove 72% of our total sales volume." He added, the company expects mobile, digital, loyalty, and delivery to "to continue to grow and drive" the business.

An example of Starbucks' digital push: This week, Yahoo Finance spotted one location in Long Island, New York (pictured above) that is exclusively for mobile order, drive-thru or pick-up only. No in-person orders are accepted, rather customers have to order on the app and then grab their drink(s) and bakery item(s) off the ledge once ready. Drive-thru is also an option for customers.

The free birthday drink stays

Customers that use a Starbucks card on the app will continue to earn 2 stars for every dollar spent, with the ability to earn "bonus stars" on games and personalized offers on "Double Star Days." Members can still use the reusable cup perk, which provides 25 stars to Starbucks rewards members. That program re-launched earlier this year. Customers can also grab free refills of hot or iced coffee and tea in the stores.

And the free Birthday Reward is here to stay. Schultz added, in his fourth-quarter earnings call: Rewards members "drove a record 55% of tender in our US company-operated stores in Q4 ... We have significant untapped opportunities to grow our rewards program in a very unique way."

This decision to keep this promotion for Starbucks' reward members comes after Dunkin' faced backlash over getting rid of the free beverage offer on customers; birthdays. Dunkin' replaced it it with "3X POINTS" on any purchases made during the day before, on, and and after customers' birthday.

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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