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

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Some experts say the cost of maintaining loyalty programs, as well as recent impacts of inflation and changes in consumer behavior since the start of the COVID-19 pandemic, are among the reasons why companies may be pulling back.

"While we're assessing our own personal expenses, so are businesses," Marshal Cohen, chief industry adviser 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?'"

On June 1, Sephora started requiring a $25 minimum purchase for online customers looking to claim a free gift and 250 loyalty points during their birthday month. Despite consumer pushback, some chains have argued adjustments to rewards programs simply reflect how customers behave. In a statement to The Associated Press, Starbucks said it "found that the vast majority of members were using their birthday reward on their actual birthday.

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 disappointment 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.

Red Robin, which said it began the dine-in only and $4.99 minimum purchase requirements to its free birthday burger "to maintain the integrity of the promotion" and give guests "the best possible experience" by celebrating in restaurants — also introduced a half-birthday treat in 2023 "as an added gesture of appreciation."

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