• by Karlene Lukovitz  @KLmarketdaily, October 24, 2008

Somewhat battered by competition from new coffee initiatives by McDonald's and Dunkin' Donuts and money-strapped consumers' growing inability to spend several dollars on a cup of java, latte or other beverage treat, Starbucks is launching a gold rewards program that offers a 10% price discount on many beverages, as well as other incentives.

The gold card program will offer 10% off on most purchases in participating U.S. Starbucks stores (excluding gift cards/certificates, publications, digital downloads, membership fees). Also, discounts applying to the existing Starbucks Card Rewards program cannot be combined with Starbucks Gold discounts.

Gold membership requires paying a $25 annual fee, but Starbucks customer data indicates that frequent customers will recoup that fee in savings in "a very short period of time," according to Starbucks spokesperson Alisa Martinez.

In addition to the 10% discount, Starbucks Gold offers the ability to pay for purchases by cash or credit card. The existing card program requires pre-loading the card with value and using it to pay at point-of-purchase. Those who purchase their gold cards at a Starbucks retail location will also get a free beverage.

The Starbucks Card Rewards program offers benefits such as gratis beverage customization (free syrups and milk options), free refills on drip coffees, a free beverage with the purchase of a bag of Starbucks whole beans, and up to two hours per day of free access to AT&T Wi-Fi at Starbucks locations. However, it does not offer price discounts.

"Starbucks is being responsive to customers' needs for savings in the current economy," by launching the gold program, says Martinez. "We realize that our customers don't want to give up their ritual of visiting Starbucks, but need to ease the pressure on their pocketbooks."

"Starbucks has enjoyed a tremendous response to its Starbucks Card Rewards program, and we're excited to introduce a new program that will elevate the reward experience for our most frequent customers and recognize them in new and different ways," said VP, customer relations management Brad Stevens, in a statement supplied to Marketing Daily.

Starbucks has not yet publicized details of the new program elsewhere in the press, but last week sent an email from Stevens to members of its existing Card Rewards program notifying them that the Starbucks Gold program will launch in early November, providing info on some of the benefits, and encouraging them to look for more details when they visit Starbucks locations next month.

Starbucks also recently sent a direct mail piece to its most frequent customers that included a gold card, more detailed information on the program, and the link to the new program's microsite (www.starbucksgold.com), reports Martinez.

Those who spring for the $25 Gold membership are not required to register their cards, but are being incentivized to do so with additional benefits.

For instance, those who register their gold cards will receive a complimentary beverage on their birthdays, according to Martinez. Starbucks may also offer "friends and family days," during which gold members can extend their 10% discount to purchases for family/ friends, and will make various special incentives and offers available to Gold Rewards members on an exclusive basis, she adds.