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Starbucks overhauls mobile rewards program, integrates with Chase Pay

Starbucks has made big changes to its mobile rewards program, adding Chase Pay to checkout and shifting how customers earn points in a bid to maintain its leadership role as competition grows.

The coffeehouse chain announced that starting in April, loyalty customers can earn stars and free redemptions based on how much they spend rather than the number of visits. Starbucks is also extending its partnerships by adding Chase Pay to the list of payment options.

“We are thrilled to have a payment agreement with Starbucks, a leader in mobile payments,” said Jennifer Roberts, president of strategic alliances and loyalty solutions at Chase. “Chase Pay solves a number of merchant pain points, lower cost of payments, zero merchant fraud liability and faster speed of checkout.”

Rewards revolution
With the mobile rewards space becoming highly diluted with big-name retailers such as Starbucks’ competitor Dunkin’ Donuts, the retailer is looking to revamp its loyalty program to retain the top spot. The rewards revamp is coming in April and will allow mobile customers to earn two stars for everyday dollar spent.

The rewards program would previously register visits rather than money spent. Users would receive one star for every visit, requiring 30 stars to be considered Gold Level and 12 stars to receive a free item in the higher level.

The new system will require 300 stars for users to be considered Gold and 125 stars to earn a free reward in Gold level.

However, the payments portion of the app will remain the same with customers having to reload a digital Starbucks card, but now users can do so through Chase Pay.

Starbucks is hoping to increase the number of users in the rewards program as well as sales. The retailer made the change based off of customer feedback prompted from its app.

Users were recently prompted to rate the app and select reasons for improvement. The biggest request was for more stars based on how much is spent rather than the visits.

The retailer is walking customers through the new change by sending out an email to subscribed users. The email details the changes in the program, comparing the old system to the new side by side.

Chasing payment innovation
The Starbucks partnership is big news for Chase Pay, as it is attempting to expand to more retailers and entice more customers. The financial institution believes it is making payments more simplified and streamlined online and in stores for customers.

Chase has also partnered with Merchant Customer Exchange for its CurrentC  payments solution and hopes to be a driving force in mobile payments.

“Millions of Chase customers make purchases at Starbucks. Chase Pay will give these customers an additional payment option,” Ms. Roberts said. “Chase Pay will be integrated as a seamless and secure, tokenized form of payment in all company-owned Starbucks stores, in their app and online.

“This will be one more way Chase is making it easier to do business with us,” she said.