Review: Starbucks Rewards Visa Card

The brand new Starbucks Rewards Visa Card is now accepting applications, which is a co-brand card being issued by Chase. In this post I wanted to take a closer look at the card, now that we know all the details.

Starbucks Rewards Visa Card sign-up bonus

The card is offering a sign-up bonus of 2,500 Starbucks Stars after spending $500 within the first three months. You need 125 Stars for a free food or beverage item from Starbucks, meaning that the sign-up bonus basically gets you 20 free food or beverage items from Starbucks. For the purposes of the valuing Stars, I generally think of a free item as being worth about $5, meaning that the 2,500 Stars are worth ~$100.

On top of that, you can earn a further 250 Starbucks Stars the first time you use your Starbucks Rewards Visa Card to digitally load your registered Starbucks card in your app. That’s potentially good for another two drinks or food items.

In other words, the sign-up bonus is really for up to 2,750 Starbucks Stars, or 27 free food items or drinks.

Starbucks Rewards Visa Card annual fee

The Starbucks Card has a $49 annual fee, which isn’t waived the first year.

Starbucks Rewards Visa Card return on spend

The Starbucks Rewards Visa Card offers:

  • One Starbucks Star for every $4 spent outside of Starbucks stores
  • One Starbucks Star for every $1 spent at Starbucks stores (then you also earn an additional two Starbucks Stars just for being a rewards member

You need to spend $500 on non-Starbucks purchases to get enough stars for a free food or drink item. Since I value that at ~$5, that’s like a 1% return, which I wouldn’t consider to be compelling at all.

For Starbucks purchases you’d have to spend $125 to get enough Stars for an additional reward. Using the same value of $5 per reward, that’s like a return of 4%, which I wouldn’t consider to be that exceptional. The Chase Sapphire Reserve offers triple points on dining (including Starbucks), and I value that at a return of 5.1%.

Starbucks Rewards Visa Card perks

The card offers two other useful perks. The first one is that the card offers Gold status for as long as you have the card. Gold status makes you eligible to earn rewards, and ordinarily requires earning 300 Stars. That means you earn Gold status as long as you spend at least $150 per year at Starbucks, so if you’re already a frequent Starbucks customer then that won’t get you much value.

The other benefit of the card is that you get eight “Barista Picks” per year. Since this has been a point of confusion up until now, let’s take a look at the terms & conditions of this benefit:

As a Starbucks Rewards Visa cardmember, you will receive eight (8) complimentary food or beverage items (“Barista Picks”) as described below in each twelve (12) month period beginning 45 days following the opening of your account.

Each Barista Pick is available as a coupon automatically loaded to your Starbucks Rewards account which may be redeemed for one (1) complimentary item at a participating Starbucks store as described in the terms of the applicable Barista Pick coupon. Substitutions and customizations are not allowed unless specifically permitted by the Barista Pick coupon. Barista Picks cannot be redeemed for cash or Stars.

Each Barista Pick expires 30 days after it has been loaded onto your Starbucks Rewards account. If you have provided us with a current, valid email address, you will receive an emailed notice that the Barista Pick has been loaded to your account. One Barista Pick will be loaded approximately once every six (6) weeks.

You must present your registered Starbucks Card to the barista at a participating Starbucks store in order to redeem your Barista Pick. The Barista Pick benefit will be awarded as a single coupon valid for one-time use, regardless of the number of authorized user cards associated with your Starbucks Rewards Visa account.

As you can see, Starbucks will send you eight codes throughout the year, and they are each valid for 30 days and can be redeemed for select food or drink items.

Bottom line

I’ve gotta be honest, I don’t see much value here at all. A sign-up bonus that gets you up to 22 free drinks or snacks is worth at most $110, at a valuation for $5 per item. That’s not even factoring in the annual fee.

Beyond that, the card has a $49 annual fee, though the eight free (restricted) drinks or snacks help offset that a bit. But even at $5 a pop, the eight rewards don’t quite cover the annual fee.

On top of that, the card doesn’t offer a compelling return on spend. At a valuation of $5 per Starbucks snack or drink, you’re earning a return of 1% on non-Starbucks purchases and a return of 4% on Starbucks purchases.

What do you make of the new Starbucks Rewards Visa Card?

Comments

  1. Really bad card. I have a feeling this will be a big flop.

    Also, “In other words, the sign-up bonus is really for up to 2,750 Starbucks Stars, or 27 free food items or drinks.” I think your math is off. 2,750 would be 22 free food or drink items, not 27.

  2. Disappointing. I agree with “S Nack” on 12 barista picks a year. Should be double stars for spend in the stores. An annual fee? Really? With so many reward cards available without an annual fee, why would I want to entertain this? They should have at least provided criteria for getting rid of the fee, such as requiring a minimum annual spend to avoid the fee for the following year.

    With the volume of annual stars people will earn using the card, it makes me wonder when they will create a tier above Gold.

  3. As much of a flop this card will be for readers of this site I got to assume people will open this card. People are obsessed with Starbucks for some crazy reason. I see people who are Starbucks loyalists and not points/miles collector making this card successful. If these people are drinkin Starbucks then they prob aren’t smart enough to figure the reward structure out.

  4. Not sure what level of consumer sophistication this card is targeted at—people who need a drink after a Tide pod challenge?

  5. It’s a bad deal as far as new rewards cards go, but I wouldn’t be surprised to see it be more popular than we’d expect since there are enough people buying ~2 drinks/day at starbucks who may not calculate the ROI on this.

    Their obfuscation of rewards in “stars” might complicate it enough for latte toting loyalists to not figure out the math.

  6. This has to be the most ridiculous card ever launched. Who loves Starbucks that much that they will go this length + $49 fee to get some free coffees ….baffled

  7. The really stupid thing about this card is that you earn less points when you use it at Starbucks than outside of Starbucks, like say at a competitor’s coffee shop. This is like a Hilton card that gives you 4 points per dollar when used at a Hilton Hotel but 5 points per dollar when used at a Holiday Inn.

  8. Actually, for me, I don’t think it is a bad deal for the first year only. When I earn a free item, I use it for one of the new Mercado salads, which are $10.95. Twenty two of those would be well over $200. Plus the barista picks. I’ll definitely give it some thought.

  9. I remember there being a Chase Starbucks card around 15 years ago. You could use the card as a credit card or Starbucks card. I don’t recall the specifics of any reward structure, but if you loaded money from the credit card side to the Starbucks side of the card I believe you did so at a discount.

    It must not have worked out because it was discontinued after a couple of years. Anyone paying an annual fee for a card like this drinks way too much Starbucks.

  10. I go to Starbucks about 2-4 times per month and usually get a cafe misto or brewed coffee. I’m a “Gold Card” member, and I enjoy Starbucks. I’m a big fan of rewards cards and Starbucks rewards program in particular, but this Starbucks/Chase Visa is a “no go” for me because: 1) The annual fee of $49; I do not want to pay to get rewards–I consider rewards “fun extras,” not a complex financial formula; 2) the “barista picks” are mysterious — they may be over-sugary drinks I cannot consume for health reasons or food items that I don’t want to consume for health reasons and therefore would have negative value for me; 3) I enjoy the current Starbucks reward system and already have a good cash-back visa card. So, in brief, I am not the target audience for this card.

  11. With the amount of times I go to Starbucks, I’m automatically Gold, so this card doesn’t pay for me, especially with the annual fee. On top of that, I’m not a coffee drinker, so the Barista’s choice stuff I probably won’t like.

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