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Come for cheap food, stay for free food? McDonald’s is hoping consumers will do just that, induced by the new loyalty program it rolled out in July. The MyMcDonald’s Rewards program, available through the company’s app, marks McDonald’s first venture into reward programs in the United States. (It previously has established similar programs in France and a few other countries.) Customers received 1,500 points at the moment they sign up, then earn 100 points for each $1 spent. The points can be traded for treats like hash browns (1,500 points), a large iced coffee (3,000 points), or a Happy Meal (6,000 points). The benefits for McDonald’s have been well established by research into loyalty programs, which shows that they tend to lead to a more engaged customer base and provide unparalleled access to valuable digital data. But what about the customers? Why would someone spend $600 at McDonald’s, in return for the prospect of receiving a $2.79 Happy Meal for free? It may seem unlikely, but the proof of concept is in the pudding—and the burritos and the coffee. That is, similar programs have worked well for other companies, including Chipotle and Starbucks. At Starbucks for example, the loyalty program grew by 18 percent from March 2020 to 2021, enabling the company to not just survive but even thrive during the pandemic.

Source: Dave Sebastian, “McDonald’s Loyalty Program Goes National,” The Wall Street Journal, June 22, 2021; Alexis Morillo, “McDonald’s New Loyalty Program Is Launching Today—Here’s How It Works,” Delish, July 8, 2021; Larry Dignan, “Starbucks Leverages Loyalty Program, Digital To Navigate Customers’ New Normal,” ZDNet, April 28, 2021