Loyalty points Archives - Public Interest Advocacy Centre

Next Steps on the Loyalty Points Story

piac_admin — Thu, 19 Jan 2017 15:22:47 +0000

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.

PIAC’s Position?
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.

The post Next Steps on the Loyalty Points Story appeared first on Public Interest Advocacy Centre.

What Can Air Miles do with all those Expiring Miles?

piac_admin — Tue, 19 Jul 2016 18:09:20 +0000

In December 2011, Air Miles announced going forward its reward miles will only be valid for 5 years. As a result, after December 31, 2016, Air Miles older than five years begin to expire on a quarterly basis. Air Miles spokesperson have repeatedly noted some collectors are “still not using the miles they collected decades ago” and “believe five years is very reasonable to expect someone to use miles and get a reward that betters the way they live their lives every day.”
The expiry information has been provided on the Frequently Asked Questions section of the Air Miles website. However, the CBC has concluded Air Miles may not have distributed any public follow-up announcements since 2011 or any warning messages to its customers.
Regardless, word has gotten out to enough Air Miles members to apparently generate problems for Air Miles and consumers. Media outlets have recently commented on frustrations experienced by Air Miles members trying to redeem their older Air Miles for fear of losing them. Phone wait times have reportedly been 2 hours or more. Air Miles notes many rewards options are redeemable online. However, items such as vacation package deals must be booked by phone. Thus consumers wanting to spend their hard-earned Air Miles on that dream vacation or a trip to see family have little choice but to stay on hold or attempt requesting a callback by Air Miles staff.

Redemption Spike Could Have Been Foreseen
Air Miles could have anticipated this spike in redemption demand based on a previous experience by Aeroplan. In the late 2000’s, Aeroplan instituted a policy where loyalty points more than 7 years old were to begin expiring on January 1, 2014. In 2013, an annual North American seat reward availability survey noted the availability of flights through Aeroplan took a dramatic dive in 2013 when compared to previous years. A reasonable person could conclude the reduced availability of Aeroplan reward flights were a response to the approaching point expiry deadline.
About 6 months before points initially expired Aeroplan canceled the expiration policy. However, it appears Air Miles is not willing to follow suit. This leaves Air Miles in a quandary. A program designed to keep customers happy and have them spend on products and services is now irritating some of their members by:

Taking some of their loyalty currency away
Making the redemption process a less than pleasant experience

PIAC contends the redemption process is critical for both consumers and loyalty program providers – a positive redemption of loyalty points may lead customers to become brand advocates for the program. A negative redemption process leaves consumers alienated, which is the risk Air Miles increasing faces as its points expiration policy inches closer to reality.

How Can Air Miles Respond?
A simple yet effective response would be for Air Miles to simply employ more staff at their call centre to address the excess demand. Air Miles could follow the lead of Aeroplan by cancelling the expiry policy before it takes effect December 31, 2016. However, assuming Air Miles remains committed to having their miles expire, here are a couple of suggestions to remove some of the public relations sting out of the collective frustration experienced by their Canadian customers. Air Miles stands to gain by having millions of Air Miles expire each year going forward. Each expiring Air Mile represents an outstanding liability removed from its books. In response, Air Miles could take a percentage of expiring Air Miles and donate them to any number of the thousands of registered charities operating in Canada. Alternatively, Air Miles could establish an “Air Miles Charity Bank” where organizations could submit short applications for Air Miles to further their charitable activities, fueled by expired Air Miles.
These suggestions allow Air Miles to create new beginnings out of a story that so far has only grown a bumper crop of consumer frustration.

Jonathan Bishop has been a Research Analyst with the Public Interest Advocacy Centre (PIAC) since 2012.
PIAC explored the operation of customer loyalty programs in Canada in 2013, noting 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 entitled, “Customer Loyalty Programs: Are Rules Needed?”, 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.

The post What Can Air Miles do with all those Expiring Miles? appeared first on Public Interest Advocacy Centre.

Time to Check-Out of Loyalty Program Rewards?

piac_admin — Wed, 09 Sep 2015 13:33:17 +0000

It has been taken for granted that Canadians love their loyalty rewards. 89% of Canadians are members of a loyalty program and the average Canadian participates in 8 different loyalty schemes. However, not all may be as rosy as loyalty program marketers may have you believe.
A recent survey released by loyalty program provider Aimia reveals Canadians are becoming increasingly concerned with the data companies are collecting about them. For instance, 83% of Canadians surveyed said they want more control over what data companies hold about them, while 20% have closed accounts or subscriptions over concerns about how their personal information was being managed. Surprisingly, only 8% of Canadians surveyed feel they are actually receiving better offers as a result of sharing their details.
Part of the reason for this apparent consumer frustration is a sense that it simply is not worth it anymore. For some Canadians, the benefit of obtaining a reward in exchange for their data is no longer as apparent. No doubt, some of this frustration has been caused by loyalty program providers themselves.
For instance, the popular SCENE program offered by Cineplex recently amended their terms and conditions. After November 4, 2015, general admission movies will still cost 1,000 SCENE points, but premium movies such as 3D or Imax, will cost 1,500 points, and VIP tickets will cost 2,000 SCENE points. Until now, SCENE members can gain free tickets to any general admission, premium or VIP movie if they have saved 1,000 points. Cineplex also plans to boost the number of SCENE points awarded for each premium movie ticket purchased to 150 points and for VIP movies to 200 points.
The result is that current SCENE members who have been saving their points for a VIP ticket are about to have the value of their loyalty currency cut by 50%. PIAC, as outlined in a 2013 report entitled “Customer Loyalty Programs: Are Rules Needed?”, believes the devaluation of loyalty currency is an ongoing issue for consumers.
Canadians live in an era where one can pay a portion of their student loan with loyalty points. Some Canadians will soon be able to earn loyalty points from the government for joining a gym or getting a flu shot. Since governments are beginning to get involved in the distribution of loyalty currency, perhaps it’s time for decision-makers to consider protecting Canadians from drastic cuts to the value of their hard-earned loyalty currency.
Perhaps now, rules are needed.

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