Commentary: Understanding My Starbucks Rewards - The 4 most common pitfalls

We live in a time of confusing Starbucks rewards. It won't always be this way, but for right now, it is.  Today (3-13) as I stood in line at Starbucks in Lynnwood, Washington, I saw the following exchange: Customer: "Quad venti iced white mocha latte."

Barista:  "$6.11" (Caveat: Melody doesn't remember the exact price).

Customer: Hands barista a gold Starbucks card, the kind with her name on it.

Barista: Swipes card. It still says your balance is $6.11.

Customer: The customer, a short asian woman buying a drink twice her size, says something that I could not hear.

Barista: "Let me swipe your card again. Maybe it is supposed to discount it. Nope, your total is still $6.11.  There is no money on the card."

Customer: Again I couldn't hear the customer because her voice was too quiet.   Customer appears perplexed and hands some cash to barista.

I watch as the customer hands the barista some cash AND the gold card.  At least eventually her drink gets paid for.

Even right in Seattle I routinely run into baristas who have no idea what the My Starbucks Rewards are, and even have had one barista tell me that she doesn't care.  This blog post is just the common areas of confusion at the store-level associated with these loyalty rewards programs.  I am going to outline here the common sticking points that I personally hear about and watch as the points of confusion for the rewards programs:

Common problem points of the loyalty rewards programs:

1.  The Black Starbucks Gold Card

If I am using my black Starbucks card, it causes confusion.  The problem:  Currently there is NO way for a barista to look at the card and know which of two Starbucks programs the customer is enrolled in.  As a consequence, if a customer hands a barista a black card there is no way that the barista can even begin to talk about the customer's rewards before asking the question, "I see you have a black card. There are still some black cards under the old ten-percent off program, and there are some black cards registered and under the new My Starbucks Rewards program.  Do you know which yours is?"

Let me repeat this, because I watch this mistake happen all the time: If a barista is handed a black card, there should NOT be any assumptions that the customer is getting ten percent off the purchase.  Rather, the barista can only make educated statements about the customer's perks by asking which program he or she is enrolled in.  However, baristas routinely assume that a person using a black card is NOT part of My Starbucks Rewards.

Why is this true? Well this is true because a customer can use ANY Starbucks card to be a part of the new My Starbucks Rewards.  Actually, this is one of the improvements that did happen with My Starbucks Idea.  It is far more flexible to be able to use ANY card for My Starbucks Rewards, so some customers may have their favorite customized card, a (Red) card, a First and Battery Card, an old Shareholder Card, a new green Conservation International Card, or ANY card of their liking.  I think there was even an Ichiro baseball Starbucks Card once upon a time, and I regret not collecting cards back when I saw it in the stores!  I didn't care about the card until Howard announced card benefits at the 2008 Shareholders' meeting!  (As to the Ichiro card, I'm not into any sports, but I love Seattle and the Ichiro card tugs at my hometown love).

The bright side to this:  One thing about this sticking point is that it WILL get better.  By the time we get to the year 2011, this common problem and assumption as described above will be gone.  Starbucks has said that there will be no more black cards left with a 10% discount when we get to 2011, and this is because there were only a limited number of them sold, and the ability to buy and register one ended in late 2009.

Let's just hope though that baristas don't try to take and throw away the black card from customers.  If the customer wants to keep using the card, he or she can.

2. If you're buying a pound of whole bean coffee, you can get ANY beverage in a tall size free.

This reward perk causes enormous confusion. I've experienced myself, read about it on MSI, and see others go through this in the stores.  It is a perk of ANY beverage in the tall size, and not just a free drip brewed coffee.  If the customer wants a 4 shot, espresso Frappuccino, then that's what the barista gives the customer.  The drink is simply entered into the register and then when the card is swiped, -- and  assuming that there's money on the card, it's registered, and at the green level or higher, -- the drink will magically be "no charge" on the receipt.

If the Starbucks card is (1) Registered online (2) A part of MyStarbucksRewards (automatically true if registered unless by chance the customer has an old black card and still under the 10% discount) (3) pays with the registered card and (4) is at the "green" level of rewards or higher then the tall beverage will automatically be free.

There is no code to make this work. The register will do all the work. There is no special code on the bag of beans.  I have seen it happen many times where I ask the barista for a tall beverage and the barista picks up the bag, confused look on his or her face, and says, "isn't there a code on the bag?"

I've also seen many a barista simply NOT input the tall drink into the register at all, and simply 'give' the drink away.  This is not correct either (as far as I know).

Over the two years that My Starbucks Idea has been around, there have tons of threads on this topic, but here are just a few examples:

Another Gold Card comment ... What's the free drink with bean purchase?

Train the store staff

Free Tall Drink with 1lb Whole Bean purchase

Customer Service

Make it crystal clear on free tall drink with lb/Coffee

And once in a blue moon the issue pops up in tweets too:

http://twitter.com/karldotcom/status/11553393185

A second point of confusion around this, though far less common than the above scenario, is what happens when the customer is buying one pound of small-batch Clover coffee offerings.  I used to complain that the register would not give a free beverage automatically above because it was unaware that a person was buying one pound of coffee.  All of the small batch coffees are only sold in half pound sizes, meaning that the register has to know to add up two half pound bags to make one pound.  I know there used to be some kind of bug with this, but amazingly, it's been fixed. It works now! The register can add up two half pounds of small batch Clover offering coffees and then give the tall beverage as free! Wow! So this too should be seamless. But again, the customer has to be buying a full pound of coffee to get the perk.  Despite that the small batch coffees are expensive, there is NO perk of a free tall beverage if the customer is buying just a half pound of coffee.  100% Kona is $19 per half pound, and Yirgacheffe is about $12 per half pound.

3. I just got a Gold Card with my name on it? What do I do with it? What's it for? Do I have to use it?

For some reasons both partners and customer get confused that there is some magic to the Gold Card that doesn't exist in any other registered card. That's not true (at this point).  When a customer receives a Gold Card in the mail, with the customer's name on it, there is NO requirement to switch to the Gold Card.  And funds are not automatically transferred back and forth.  If the customer decides that he or she wants to use the Gold Card, he or she must take the affirmative step to put funds on it. This inherently confuses the customer who hasn't read the fine print about what he or she actually can or should do with this card.

4.  What's a sauce? What's a syrup?

In March 2008, when Starbucks announced card benefits, they told customers that syrups would be free with a registered card.  It's been two years and I still see confusion around this.  Just to be clear, this perk is now part of the "green" level of My Starbucks Rewards.

The average ordinary Joe customer really doesn't know what is a sauce and what is a syrup.  From the perspective of the customer, if they're even paying attention in their peripheral vision, they see some bottles, and a barista pumping something into their cup, and that's about it.

Of course when Starbucks opened up the door to this perk in 2008, it wasn't their intent that from that point forward every drink is simply charged as just a "latte" because everything else is just a modifier on one basic drink.  However, the average customer isn't operating at a level of Starbucks sophistication to immediately understand that there is a distinction to be made between Mocha Sauce and Vanilla Syrup.

As a consequence, the barista at the register has the space of ten seconds to try and explain, "You get free syrups of our regular selection of syrups, but not free premium seasonal syrups and not sauces, because a sauce is not a syrup. A sauce is thicker than a syrup, and Mocha is a sauce."

Just as an example of the confusion this causes, here's a thread on MSI where the customer doesn't really understand that Mocha is sauce, and so a barista has to step in and gently explain the customer the mocha is a sauce.

Better Rewards for People Who Like Mochas

Despite that trying to explain this benefit in ten seconds at the register is a challenge, most baristas really do quite well at explaining it from what I can see.  The confusion consistently arises on the side of the customer, not on the partner side. (Contrast the whole bean purchase and ANY tall beverage which has the reverse problem:  Lots of customers are acutely aware that they can receive any tall beverage free with a whole bean purchase, but baristas often appear unaware and confused how best to effectuate this reward).

Key questions at the register when dealing with card rewards:

1. For customers with a black Gold Card, the first question out of the barista's mouth should be "Is this card under the old 10% of Gold Card program or under the new My Starbucks Rewards?".  There is NO WAY a barista can really give accurate advice without getting the answer to that question from the customer. Since ANY card may be enrolled under the new My Starbucks Rewards, it may even be a black card.

2. Is there money on this card? That might be a particularly useful question for people carrying the Gold Cards because not everyone seamlessly figured out that you only get a perk if you put money on it.  Although ultimately, the barista is going to see pretty quickly if there is money on it once the card is swiped.

3. Is this card registered? This question is best suited for customers carrying any of a myriad of cards whether it is a Shareholder Card, mini card or (Red) Card.  The Gold Cards with the customer's name on it are automatically registered.  Of course, if the the customer says "no" it opens up the door to talk about the benefits with registering the card.  Hopefully the customer will be enticed by the idea of earning free drinks every 15 swipes.  Of course, one thing the barista could do is simply look at the back-side of the card and see if the pin number has been scratched off, so that it is now readable.  That's going to be a very good sign that the card is registered.  And the Gold Cards with the customer's name on it are automatically registered.

On the plus side, all of the above should get easier over time as people get used to the My Starbucks Rewards program.  By 2011 this might be a breeze, but it still leaves a few months of growing pains now.  After all, many Gold Card holders were automatically enrolled in the new My Starbucks Rewards program on January 5th this year, so we're really about 3 months into the new rewards.  I guess a few hiccups now and then are to be expected. Please note that all of the above information in this posts applies to the United States only! Other Starbucks markets have some card benefit but often isn't quite the same as the U.S. version.  That's it for the quick review of common rewards sticking points!  Your comments are welcome!

Starbucks in the Philippines: The experience around the globe and chalk art adventures continue

The Starbucks building at 505 1st Avenue South