Double-Dipping at Starbucks

If you go to Starbucks once every two months or more, you should pick up a Starbucks gift card. And register it.

The Starbucks Rewards program is a hybrid between a store loyalty card and a store credit card. Just like a loyalty card, with each transaction, you accumulate points and make your way to earning more benefits. But similar to a store credit card, the benefits only accrue if you use the store card rather than your primary credit card to pay. In Starbucks’ case, however, there’s no need to give out your social security number and wait to get approved. Rather, to accumulate Stars (their version of points), all you have to do is pay for your drinks and food with a Starbucks gift card.

This is how the program works: first, you get yourself a Starbucks gift card. They come in several different styles and may even vary by city – any of them is fine. It can also even be the gift card that you receive when you redeem your credit card points. Then, you create an account in the Starbucks Rewards webpage and register that gift card. From that moment on, you will get one Star each time you make a purchase (no matter what you buy or how bill or small the bill) at Starbucks using that gift card. You can register as many gift cards as you want in your account.

The benefits increase with the number of Stars you get, and will be more or less meaningful to you depending on your drinking and loitering habits. Here are the benefits at each level, straight from the Starbucks Rewards website:

 

Starbucks Rewards Benefit Levels

 

It’s a little annoying that you need to reach 45 Stars to earn your first “free drink every 15 purchases”, but the good thing is that as long as you maintain your Gold status, you’ll keep earning this benefit. That is, provided that you make 30 purchases  at Starbucks every 12 months, you’ll continue getting a free drink every 15 purchases – you don’t have to go 2 rounds of 15 without earning anything again.

To Double-Dip

Now, because Starbucks Rewards requires that you use their gift card to pay for your purchases in order to earn Stars, it may seem like you’re giving up on earning whatever points or cash back you earn through your credit card – but you don’t have to. This is the perfect double-dipping opportunity: a Starbucks gift card can be re-loaded as many times as you want, so why not re-load it using your preferred credit card?

Suppose you go to Starbucks twice a week. Next time, rather than paying for your order on your credit card, you can pick up a Starbucks gift card right on the counter and use your credit card to load it with, say $20. Then use that to pay for your order and all your subsequent orders until the balance runs low again. Then just use your credit card again to re-load it. This way you earn your credit card points (loading a gift card will show up in your credit card statement just like a purchase and earn you the points or cash back accordingly) AND accumulate Stars.

If you have the CitiForward card, for example, this method will earn you 5 ThankYou points whenever you re-load the Starbucks card and a Star each time you actually use it. The Starbucks Rewards webpage even allows you to set up for auto-reload if you so prefer.

If you have a credit card with 5% cash back categories that rotate every quarter, this approach allows you to stretch that benefit even further. For instance, from July to September 2012, the Chase Freedom card is giving 5% cash back on gas station and restaurant purchases. Since Starbucks counts as a restaurant for that credit card, you could load your Starbucks gift card before September 30, 2012, with roughly what you would spend over the following couple of months. Then, even once October kicks in, you can continue paying for your drinks with your Starbucks gift card, essentially earning 5% cash back for drinks bought outside the 5% cash back window!

Also note that your Starbucks gift card can be used in various countries including Canada and the UK – even if purchased and loaded in the US – so no need to worry about foreign transaction fees or navigating local currencies just to get a cup of coffee. And you still get a Star.

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