By Louis DeNicola, Cheapism.com
Coffee is a big and competitive business in the United States -- Statistic Brain reports that consumers spend more than 18 billion dollars a year on specialty brews alone -- and coffee shops are working hard to build loyal followings. Some do so with exceptional service and delicious drinks and others rely on low prices. Another tactic: a coffee rewards program. Independent coffee houses likely do this with a stamp or punch card while some larger chains have embraced the plastic gift card.
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We looked at the coffee loyalty programs at six of the largest brewed-coffee purveyors and found that a free drink is just the beginning. Some coffee rewards programs give away snacks, refills, upgraded sizes, and extra credit for reloading gift cards.
- My Starbucks Rewards is the largest and most well-established coffee rewards program. Members who register a gift or credit card and make one purchase earn one "star" and then receive a free drink or snack on their birthday. After accumulating five stars (i.e., purchases), in-store refills are free; 30 stars earned within 12 months yields a free snack or drink with every additional 12 stars. Starbucks recently began giving members one star for each package of Starbucks coffee purchased at grocery stores (enter the code in your online account), and a promotion running until October 19 awards additional stars, free food and snacks, and a $10 gift card for purchasing up to four bags.
- Tully's Coffee was started in Seattle as a rival to Starbucks. Over the past 21 years it has slowly expanded, primarily on the West Coast. Tully's coffee loyalty program requires members to use a registered reloadable gift card that comes with two perks: Adding more than $20 at a time delivers a 10 percent bonus, and for every 10 drinks loyalty cardholders receive one free.
- Caribou Coffee, based in the Midwest, is just now testing an inventive and secretive coffee rewards program in 10 locations. Members earn upgraded sizes, free food, and free coffee, but how they earn the perks is a complete surprise. The reward is valid for seven days and members are notified via email or text when they score.
- Peet's Coffee & Tea loyalty program offers home delivery service with 50 off shipping. The coffee, however, is still full price. Coffee drinkers looking for in-store perks are out of luck with Peet's, but gift-card holders who set up an account and choose automatic reload receive a 5 percent bonus for every addition of $25 and up.
- Dunkin' Donuts fans can sign up for the Dunkin' upDDate email list to receive a free medium beverage and another on their birthday. At one time Dunkin' also offered a rewards program that allowed members to use a registered gift card and earn up to two Dunkin' Dollars for each $20 spent, but this coffee loyalty program was discontinued in December, 2011. Early in 2013 the Wall Street Journal reported that a revamped rewards program would be launched to complement the chain's new app.
Bottom line: Tully's coffee loyalty program is the most rewarding. On its own, the one free drink for every 10 purchased is an excellent deal, but the 10 percent bonus when refilling gift cards sweetens the pot. Tully operates fewer than 50 locations, however, and with a Starbucks on almost every corner in many communities the My Starbucks Rewards program will likely remain the most popular -- at least until Dunkin' Donuts weighs in.
A Final Tip. We checked GiftCardGranny.com, an aggregator for sites that buy and sell store gift cards, and found coffee rewards cards going for at least a 10 percent discount off their loaded value. Regular fans of Starbucks (11 percent reduction), Tully's (12 percent off), and Peet's (15 markdown) may find buying a loaded second-hand card is a good way to stack rewards. Many of the coffee rewards programs encourage the use of a gift card anyway, so why not start with one bought for less than the face value?
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