During the last six months of 2016, there was much discussion about the plan by Air Miles to let miles five years or older expire starting January 1, 2017. However, in December, the Ontario Legislature passed Bill 47, Protecting Rewards Points Act, prohibiting the expiry dates on reward points programs based on time alone in Ontario. This led many to conclude this story is over. However, for consumers, and especially those Canadians with loyalty point balances, what happens next may be just as important as the passage of the bill.
So What Happens Next?
The Government of Ontario plans to consult with the public and businesses to develop regulations aimed at protecting consumers’ points while maintaining the viability of rewards programs. No details have been announced regarding the timing or the format of this consultation process.
Photo courtesy of Steve Buissinne
Why is This Important? Three Words: The Fine Print
Just like the terms and conditions of your loyalty program membership agreement, the fine print of Bill 47 had unexpected surprises for Ontario consumers. The bill amends the Ontario Consumer Protection Act to allow the Lieutenant Governor in Council (i.e. Cabinet) to make regulations “governing the transfer of rewards points among consumers, including upon death.”
What does this mean? Currently, policies regarding the transfer of loyalty points are determined by loyalty program providers. Some loyalty programs, such as the Shoppers Optimum Program, allow the transfer of points between members free of charge. Others, such as Aeroplan and WestJet Rewards, charge a fee to transfer, while several programs prohibit the transfer of points altogether.
Loyalty program providers appear to hold all the cards when it comes to terms and conditions of their programs (Photo courtesy of Piotr Lohunko)
A similar potpourri of policies apply upon the death of a loyalty program member. Some loyalty programs allow the transfer of points to a loved one while others simply close the account. The bottom line is these policies are largely dictated to consumers by loyalty program providers. However, the impending consultation and the creation of regulations by the Government of Ontario may change that. This could benefit Ontario consumers in particular and by extension consumers across Canada.
In 2013, in a report entitled, “Customer Loyalty Programs: Are Rules Needed?”, PIAC discovered there were a number of consumer irritants associated with loyalty programs. PIAC concluded that industry-wide guidelines were required relating to loyalty currency transfers and bequeathal. Moreover, PIAC called for the creation of a complaints body for consumers on issues that arise relating to the operation of loyalty programs.
As a result of the Bill 47, the Ontario Ministry of Government and Consumer Services may have just become the loyalty program complaints body that PIAC requested. In addition, any future regulations regarding the transfer and bequeathal of loyalty points may answer PIAC’s call for industry-wide guidelines.
What’s the Catch?
The catch is that the Government of Ontario is not legally compelled to do anything. The relevant clause of the Ontario Consumer Protection Act amended by Bill 47 states the Lieutenant Governor in Council (i.e. Cabinet) may make regulations regarding the transfer and bequeathal of loyalty points. While it certainly appears the Ministry of Government and Consumers Services intends to create regulations, the Ministry could theoretically walk away from this exercise at any time.
Photo courtesy of Negative Space
What Can Consumers Do?
PIAC believes all loyalty programs should operate under the same rules regarding the transfer and bequeathal of loyalty points. Whether or not you agree with this statement, the Government of Ontario is providing a ground-breaking opportunity for consumers to comment on loyalty program policies with the potential to make them better for consumers. As a result, consumers can bring any loyalty program issue they feel is important before the Ministry of Government and Consumers Affairs or your Member of Provincial Parliament (M.P.P.) for their consideration.
PIAC encourages Ontarians and all Canadians to send a message to the Government of Ontario expressing the need for new regulations on loyalty currency transfers and bequeathal. In addition, PIAC believes the Government of Ontario should further examine those loyalty program issues identified by consumers during this consultation process.
- The Ontario Ministry of Government and Consumers Services can be reached by clicking here.
- Here is a list of Members of Provincial Parliament
Make sure the Government of Ontario follows through on its plan to consult and to develop regulations aimed at protecting consumers’ loyalty points.
Jonathan Bishop has been a Research Analyst with the Public Interest Advocacy Centre (PIAC) since 2012. He is the author of PIAC’s 2013 study of customer loyalty programs in Canada entitled, “Customer Loyalty Programs: Are Rules Needed? The report noted consumers have little recourse when loyalty program providers unilaterally decide to devalue their loyalty currency, or change other terms and conditions of loyalty programs. PIAC advocated for industry-wide guidelines relating to loyalty currency devaluation, transfers and bequeathal. Moreover, the report called for the creation of a complaints body for consumers on issues that arise relating to the operation of loyalty programs, as well as guidelines for the notice given to changes in loyalty program terms and conditions.