Starbucks Updates Its Loyalty Program

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Category: Business

Listening

Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. redeem / rɪˈdim / (v) – to exchange something for money, goods, etc. 
    Example:

    The coupon can be redeemed at any of the store’s branches.


  2. pastry / ˈpeɪ stri / (n) – a baked product, usually sweet, made from flour, sugar, milk, butter, etc.
    Example:

    I bought different kinds of pastries from the bakery.


  3. in-app / ɪnˈæp / (adj) – available or done within an app
    Example:

    Access to the new feature is available as an ­in-app purchase.


  4. recognition / rɛk əgˈnɪʃ ən / (n) – the acknowledgment or appreciation of someone’s achievement, service, etc.
    Example:

    The school gave recognition to its top 20 graduating students.


  5. draw / drɔ / (v) – to cause someone or something to come to a place
    Example:

    The store drew more customers by offering big discounts.


Article

Read the text below.

Starbucks is updating its loyalty program by allowing customers in the United States and Canada to get rewards using any payment method.


The coffee chain’s current loyalty program requires customers to use reloadable Starbucks cards to collect points for rewards. Through this payment method, customers can earn two points per dollar they spend at the café. The points can be used to redeem rewards like free coffee or pastries.


Under the new loyalty program, customers can use cash or link their debit or credit cards to their loyalty program accounts to make in-app purchases or buy things from Starbucks locations. These alternative payment methods, however, generate points at a slower rate compared to Starbucks cards. Customers using these methods will only receive one point for every dollar.


Starbucks explained that the purpose of the gap in the points earned is to give recognition to customers who make an additional effort to reload a loyalty card when purchasing items.


Starbucks said that the new update is the company’s response to feedback from customers who have been requesting additional payment options to earn points. The coffee chain hopes that its expanded loyalty program will draw more customers.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

• Do you think making changes to Starbucks’s loyalty program is a good business move? Why or why not?
• How can the company convince customers to continue using the Starbucks card (e.g. increase the number of points earned, give a free item for every purchase using the card)? Discuss.

Discussion B

• As a consumer, which is the best payment option for you (e.g. cash, debit cards)? Why?
• As a consumer, what draws you to a business (e.g. quality products/services, good customer service)? Discuss.