Starbucks announced Tuesday that members of the loyalty program will have more ways to pay for their drinks as the coffee chain struggles to recruit more enthusiastic customers.
Since its inception, Starbucks Rewards has only accepted pre-loaded gift cards as payment. Starting this fall, customers can link their credit or debit cards or PayPal accounts to pay in-app. And if they prefer to pay in person, they can also use cash, credit or debit cards or select mobile wallets and still earn points.
The company last renewed its loyalty program in 2019, adding more redemption options and getting rid of the two-tier system to motivate customers to return to their cafes. As the coronavirus pandemic and related store closings weigh on Starbucks’ American business, loyalty members can help sales return to their previous levels. Starbucks said in June that it expects sales at the same U.S. stores to drop between 10% and 20% in fiscal year 2020.
The changes were unveiled as many restaurants and retailers are evaluating the best ways to boost contactless payment to reduce the risk of the coronavirus spreading. Mastercard reported a 40% increase in contactless payments, such as tap-to-pay and mobile payment, during the first quarter.
Starbucks, long seen as a leader in restaurant technology, has reported an increase in the income of its loyalty program members during the pandemic. In the United States, 48% of sales in the last week of May came from Starbucks Rewards members, compared to 44% in the quarter ended March 29, according to a regulatory document. The program had 19.4 million active U.S. members, as of March 29.
Starbucks chief marketing officer Brady Brewer said in an interview that the pandemic did not propel the company to speed up the launch, but it did take much more effort to stay on track with its original timeline.
“This has been a top request for customers for a long time,” said Brewer. “In these conditions, it is even more relevant.”
New forms of payment will generate points, or stars, as the company calls them, at a slower rate than a Starbucks gift card. For every dollar spent through a preloaded card, loyalty members earn two stars. Paying with cash, credit or debit cards, mobile wallets or PayPal will generate only one star for every dollar spent. Starbucks spokeswoman Erin Shane Riley said the difference in rates recognizes that customers who pre-load a Starbucks card go the extra step.
Starbucks shares have fallen 15% so far in 2020. The company has a market value of $ 87.2 billion.
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