Loyal customers see rewards by favored outlets get pricier
During the pandemic, many fast-food chains and restaurants used rewards programs to encourage customers to use mobile apps. It helped speed up ordering and reduced bottlenecks at drive-thru lanes and pickup counters.
The apps were also helpful in driving customers to the stores at different times with offers of free food and drinks. In exchange for sharing their information, including email addresses and favorite orders, customers could accumulate points that earned them free burgers, burritos, lattes or other items.
But now restaurants are changing their rewards programs, much to the annoyance of loyal customers. In some cases, the programs are becoming more complicated, involving “tiers.” More often, they are simply requiring significantly more points to qualify for a free entree or beverage.
The companies say inflation is to blame, that the costs of all those free burgers and Frappuccinos are adding up. But changes to rewards programs risk angering customers, sometimes the most loyal ones, who are already irritated by sharp price increases for their favorite foods and drinks in the past year.
“Oh, yes, the companies are worried that they could anger customers, and the good ones are taking a lot of steps,” like sending bonus points for free food and drinks directly to key customers, said Kate Hogenson, principal consultant at the Mallett Group, a brand-loyalty consulting firm.
Many of the rewards programs had not changed since before the pandemic, which meant customers were accumulating points and rewards more quickly as prices for food and drink soared in the past two years. “Customers got used to how fast they were earning points and rewards,” Hogenson said, and now can feel cheated.
In October, Dunkin’ drew criticism across social media when it made changes to its loyalty program. Customers who used to earn a free beverage, including fancy premium drinks, after spending about $40 now have to spend about $90 to earn a signature latte.
Scott Murphy, the president of Dunkin’, which is owned by privately held Inspire Brands, said the company had rolled out the new program to deliver what customers had been asking for — food. Customers can now redeem points for food, including hash browns and breakfast sandwiches. He also said Dunkin’ had added 2 million new loyalty members since the changes.
“Since launching Dunkin’ Rewards in October, we continue to see positive momentum and strong results with the new program,” Murphy said.
Starbucks, whose loyalty program dates to 2008 and is one of the oldest in the industry, alerted its customers in a late December email that changes were coming to its program in February.
Basic drinks like coffee and tea that were once redeemable for 50 stars, or after a customer spent as much as $50, now require 100. Fancy lattes and Frappuccinos climbed from 150 stars to 200.
“It looked like something that had been written by their lawyer, and it was buried in the holiday time period,” Hogenson said. “They had an opportunity there to tell me all of the great things they were adding to the rewards program. But what people saw was that the points needed for a basic coffee or a latte went up.”
She added that later communications from the company did a better job of explaining the differences.
Starbucks lowered the number of stars required for simple iced coffee and iced tea. The company said the changes were needed to “ensure the long-term sustainability” of the program.
Some Starbucks customers said they were fine with the changes.
“They’re giving jobs to people,” said Adam Rowe, 40, a pharmacy technician for an online pet retailing company in Louisville, Kentucky. “They have to pay rent. There are reasons why they are having to do this.”