No more free coffee on your birthday? Companies rein in customer rewards programs - here's why

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Reward programs, including birthday freebies and discounts, have long been a way for brands to build loyalty and incentivize spending. But now some companies are becoming a bit more stingy -- and customers are taking notice.

Last fall, for example, many balked at Dunkin's decision to stop offering a free drink on their birthday and instead give them triple loyalty points on their purchase. On June 1, Sephora started requiring a US$25 minimum purchase for online customers looking to claim a free gift and 250 loyalty points during their birthday month. And Red Robin added a dine-in only and US$4.99 minimum purchase requirement for customers to get their free birthday burger.

"While we're assessing our own personal expenses, so are businesses," Marshal Cohen, chief industry advisor of Circana and retail expert, told The Associated Press. "Businesses have to look and say, 'Are these programs working? Are they working to full capacity? ... is there another way of doing this that wouldn't cost us as much money?'"

Still, the announcement felt off-putting for many Dunkin' customers, who shared frustrations online. In the months following Dunkin's announcement, dozens of Twitter users have expressed disappoinment over learning that the free birthday drink was gone. Some joked that they "no longer run on Dunkin,"' a dig at the chain's slogan, and others suggested that they might take their future business elsewhere.

 

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