Bank of America and Starbucks Launch Loyalty Partnership

Rhea-AI Summary

Bank of America (NYSE: BAC) and Starbucks Coffee Company (NASDAQ: SBUX) have announced a new partnership allowing Bank of America cardholders and Starbucks Rewards members in the U.S. to link accounts and earn 2% cash back on qualifying purchases, along with 1 Star per $2 spent at Starbucks. This partnership aims to provide additional benefits to clients of both companies, enhancing their everyday financial experiences.

Insights

Market Research Analyst

The new partnership between Bank of America and Starbucks represents a strategic move to enhance customer loyalty and engagement by leveraging the synergy between financial services and retail consumer experiences. The integration of rewards programs is not a new concept, but its application in this context is significant due to the size and reach of both companies. The ability to earn cash back and additional rewards for activities that customers are already performing—such as purchasing coffee—can drive incremental spending and strengthen the stickiness of both brands' loyalty programs.

From a market research perspective, this collaboration taps into the growing trend of personalized and seamless reward systems that are increasingly influencing consumer behavior. By analyzing spending patterns and customer preferences, both companies can refine their marketing strategies and offer more targeted promotions, potentially increasing the average transaction value and frequency of purchases. Additionally, the data collected from linked accounts can provide valuable insights into consumer habits, which can be used to further optimize the customer experience and develop new products or services.

Financial Analyst

In terms of financial impact, the announcement could lead to positive market sentiment for both Bank of America and Starbucks. For Bank of America, the partnership could result in increased card usage as cardholders seek to maximize their rewards, potentially leading to higher transaction volumes and interchange fee revenue. Moreover, the collaboration might contribute to customer retention and acquisition, as the combined offering becomes more attractive compared to competitors' products.

For Starbucks, the integration with Bank of America's reward system could enhance the Starbucks Rewards program's value proposition, potentially driving higher sales as members strive to earn additional rewards. The increased engagement with the Starbucks app, as indicated by the record number of active rewards members and the high percentage of rewards tender, suggests a robust customer base that is receptive to such initiatives. Over time, this could translate into sustained revenue growth and improved customer lifetime value.

Economist

The collaboration between Bank of America and Starbucks may also reflect broader economic trends such as the increasing importance of co-branded partnerships in driving consumer spending and loyalty. In the context of a competitive banking and retail landscape, such partnerships can be a strategic tool to differentiate offerings and capture a larger share of consumer wallets. By incentivizing spending through rewards, these programs can stimulate economic activity within the retail sector.

However, it is important to consider the potential economic implications of increased consumer spending on credit. While beneficial for businesses, it could also lead to higher levels of consumer debt if not managed responsibly. As such, the long-term success of the program will depend on its ability to balance the promotion of spending with financial prudence among consumers.

Bank of America cardholders and Starbucks Rewards members can link eligible accounts to earn 2% cash back from Bank of America and one Star per $2 spent at Starbucks

CHARLOTTE, N.C. and SEATTLE, Feb. 15, 2024 /PRNewswire/ -- Today, Bank of America (NYSE: BAC) and Starbucks Coffee Company (NASDAQ: SBUX) announced a new partnership that offers millions of Bank of America cardholders and Starbucks Rewards® members in the U.S. the ability to earn even more benefits by linking accounts.

Everyday Account Linking Benefits

Bank of America cardholders and Starbucks Rewards members can earn 2% cash back on top of the rewards or card benefits they already earn on qualifying purchases, and 1 Star per $2 spent at Starbucks when they link an eligible debit or credit card with their Starbucks Rewards account at BofA.com/starbucks or starbucks.com/bofa. Members can unlock their new benefits through qualifying Starbucks in-app purchases with their linked Bank of America debit or credit card – like reloading a digital Starbucks gift card, ordering ahead, or paying in the app at the register. Stars earned can be redeemed towards Rewards at Starbucks including free drinks, food, merchandise and whole bean coffee¹. 

This new program is open to currently enrolled Starbucks Rewards members and Bank of America cardholders, as well as new members or cardholders. Customers can join Starbucks Rewards at www.starbucks.com/rewards or app.starbucks.com. To apply to become a Bank of America cardholder, they can visit bankofamerica.com.

"Partnering with Starbucks is part of our commitment to invest in meaningful ways to thank our clients for choosing to do business with us," said Shikha Narula, head of consumer and small business product strategy and transformation at Bank of America. "We are pleased to give Bank of America clients and Starbucks customers even more opportunities to make their everyday financial lives more rewarding."

"We are pleased to partner with Bank of America and offer Starbucks Rewards members even more valuable benefits like Cash Back and more Stars," said Ryan Butz, vice president, loyalty strategy and marketing at Starbucks. "This partnership is the latest example of how we are continuing to invest in our most loyal customers to deepen engagement and connection by offering benefits and experiences that can't be found anywhere else."

Bank of America BankAmeriDeals^®

The partnership with Starbucks is offered through Bank of America's BankAmeriDeals program. Launched in 2012, BankAmeriDeals allows more than 45 million Bank of America clients to earn cash back on deals they choose when they pay for everyday purchases with an eligible Bank of America debit or credit card. Clients simply need to log in to the BofA mobile app, or online banking to choose which of the curated cash back deals they'd like to activate.

Starbucks Rewards

Since 2009, the industry-leading Starbucks Rewards program continues to grow in popularity and offers members rewards, personalized offers, games, exclusive deals, and the ability to order ahead and pay using the Starbucks app. In Q1 FY24 (October 2023-Dec 2023) in the US, Starbucks set new records with 90-day active Starbucks Rewards members growing 13% year over-year to a record 34.3 million. Additionally, Starbucks Rewards tender in company-operated US retail stores reached an all-time high of 59%, demonstrating increased engagement.

About Bank of America

Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumer and small business clients with approximately 3,800 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 57 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (NYSE: BAC).

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with nearly 38,000 stores worldwide, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at stories.starbucks.com or www.starbucks.com.

¹Restrictions apply.  See Starbucks.com/terms for details.

Reporters may contact:
Andy Aldridge, Bank of America
Phone: 1.980.387.0514
andrew.aldridge@bofa.com

 

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SOURCE Bank of America Corporation

FAQ

How can Bank of America cardholders and Starbucks Rewards members benefit from the new partnership?

Bank of America cardholders and Starbucks Rewards members can earn 2% cash back on qualifying purchases and 1 Star per $2 spent at Starbucks by linking their eligible accounts.

Where can customers link their Bank of America card with their Starbucks Rewards account?

Customers can link their eligible debit or credit card with their Starbucks Rewards account at BofA.com/starbucks or starbucks.com/bofa.

What can members unlock through qualifying Starbucks in-app purchases with their linked Bank of America card?

Members can unlock benefits such as reloading a digital Starbucks gift card, ordering ahead, or paying in the app at the register.

How can customers join Starbucks Rewards or apply to become a Bank of America cardholder?

Customers can join Starbucks Rewards at www.starbucks.com/rewards or app.starbucks.com. To apply for a Bank of America card, they can visit bankofamerica.com.

What is Bank of America's BankAmeriDeals program?

BankAmeriDeals allows Bank of America clients to earn cash back on chosen deals when using an eligible Bank of America debit or credit card for everyday purchases.

How has the Starbucks Rewards program performed in Q1 FY24 in the US?

In Q1 FY24, Starbucks set new records with 90-day active Starbucks Rewards members growing by 13% year over year to a record 34.3 million. Starbucks Rewards tender in company-operated US retail stores also reached an all-time high of 59%.