As your trusted business advisors I feel that it is our job to keep you updated on the latest financial analysis and provide some easy to read tools to help you with your financial planning needs. We strive to do this on a daily basis, and as such I would like to provide our followers with a short summary on the latest trends hitting the fast food industry: Reward Apps. Reward Apps come in all shapes and sizes. You can earn “points” “stars” or whatever else the industry wants to call their reward systems. But as an everyday consumer how do I know that when redeeming my points I am using them to their fullest potential? Everyone wants to make sure they are not missing out on a good deal, and as such I have taken the time to analyze two reward apps: Chick-Fil-A and Starbucks. I have made some “easy to read” graphs provided below to help you understand where you should spend your points in each rewards program. I have also determined the actual value of each dollar spent for each reward, or another way to say this is I have determined how much your points are worth when you redeem them for a sandwich when compared to a drink.

A couple of quick points about the methodology I used when analyzing the point values for both the Chick-Fil-A and the Starbucks rewards systems. First Chick-Fil-A is an exhaustive list of every item that is redeemable from the app. I am a red card member who has a large lifetime points total. I earn 12 points per dollar since I am at “red status”. However, the entry level to earn points is 10 points per dollar spent. Therefore I used the 10 points per dollar to calculate the value of the points. This changes nothing when comparing Chick-Fil-A items against other Chick-fil-A items. However if comparing across brands this will diminish the value of the Chick-fil-A items if you are earning 11 or 12 points per dollar spent due to superior status.

Starbucks uses a tiered system to redeem points. There are 5 tiers to analyze with a multitude of items on each level. There is a 25 star tier which allows you to customize your drink with “extras”, a 50 star tier for brewed hot coffee, tea or bakery items, a 150 star tier for handcrafted drinks, hot breakfast or parfait’s, a 200 star tier for lunch sandwiches, salads, or protein boxes, and lastly a 400 star tier for merchandise and at home coffee. Without even looking at the tables below I can tell two things from the setup of the Starbucks rewards program. First, always get the largest size available when redeeming stars for drinks, and second, always get the most expensive thing in each tier. There is no difference between a grande and a venti when redeeming points, but there is when paying with cash or card. The last thing I will say about this is that when I did my analysis I used all “default” sizes to determine the value for each star, so again this will change nothing when comparing Starbuck’s drinks to other Starbuck’s drinks, however when comparing drinks to food items or across brands to Chick-fil-A this will diminish the value of each dollar spent for the defaulted sized Starbucks drinks.

When analyzing the tables below we have presented several columns to make the most of our information. We have the description, point cost, the dollar cost, return per dollar spent, and dollars per. The return per dollar column tells us when you spend your points on that item “how much are you getting back per dollar spent”. The dollars per column tells us “how many dollars do you have to spend to redeem that item”. The value per dollars spent column theoretically could be used to compare cross platform i.e. Starbucks to Chick-fil-A, however as we mentioned there are two factors that distort this comparison and make it not perfect. To determine the “Value per dollars spent” we had to take into account that you get 10 points per dollar and 2 stars per dollar per rewards program. Also calculated was the average value for each rewards program which we called the “Mendoza line”. This is the line at which I would recommend you staying above when redeeming points to maximize your value.

So let’s have a look at the first graph and then talk about the trends we see and where you should use your points.

As you can see the best value is the Small Ice-dream cone. The value is that you get back $0.08 per dollar spent when you redeem your rewards points for the ice-dream cone. You can see that you also only need to spend $15 to earn enough points to redeem the ice-dream cone. I personally have two kids, which when looking for value starts working my mind to find it, which is what lead me to this point in the first place. I will get the 30-count nuggets for the whole family and usually redeem my points for several medium fries to round out the meal. I was convinced that this was the way to go to maximize the value of my points, and it turns out that I wasn’t wrong. The fries are the second best value to points ratio above. As you can see the salads and the hash brown breakfast items had the least valuable point redemption value. One last thing to note is that the Chick-fil-A values are relatively consistent and tight when compared to each other. The highest point value is more than $0.08 per dollar spent, and the least valuable is $0.46 per dollar spent. Now let’s look at Starbucks:

As stated earlier Starbucks uses a tiered reward system, which means that just about any and all items are redeemable. Therefore we had to select a sample to determine value as analyzing each and every item would be too cumbersome for our purposes. We tried to select items across tiers to determine where the best value lies. We can see that by far the best value for your star lie in the 50 star tier for the most part. This includes your basic coffee and tea as well as bakery items. In fact the best values overall for Starbucks seems to not be with the coffee or even the drinks but with the food products. All of the top ten valued items we selected were food items, and from various tiers to boot. Then as you move to the hand crafted 150 star tier the best value for your redeemable stars are going to be the more exotic items such as the tie-dye Frap.

The least valued items are going to be your more basic “hand crafted” drinks and then lastly the Avocado Spread. One important note to reiterate is that you should always Venti size your drink when redeeming stars as there is not “up-charge” when using your rewards. A grande and a venti are the same in terms of star-cost. Also when we look at Starbucks we can see that the actual dollar return for the best items are really good at $0.118 per dollar spent, however there is a much wider variance for this rewards program as the lower valued items are pretty low at a return of $0.03 and $0.017 for the lowest valued items.

Hopefully these two graphs and brief breakdown are helpful for the reader going forward when planning on how to serve your chicken and coffee addictions in the future. My hope is that I can get you to maximize your rewards potential to best benefit your tastes and needs. You have earned your rewards and hopefully now with a little help you can make the most of them and stretch your points even further.