THE BATTLE OVER CANADIAN LOYALTY AND EXPIRING POINTS

It didn’t take long after Loblaws Cos. Ltd. bought Shoppers Drug Mart in a mega $12.4-billion deal before some consumers settled in on what the “important” part of the transaction was.

“What’s going to happen to my Optimum points?”

In online chat rooms and discussions, people fretted that all their accumulated purchasing power would be wiped out — a fear that has so far turned out to be unfounded as the loyalty card for Shoppers Drug Mart, with an estimated 11 million users, has gone nowhere.

“Some people were worried (about Optimum ending) but it’s just too popular,” says Lynn Wiegard, a 45-year-old shopper from Cambridge, Ont., who can quote her shopping stats pretty quickly. “I just love the game aspect of collecting points. It’s a strategy game. You can’t play a strategy game by just sitting there and hoping for the best.”

The points game has become part of the Canadian shopping fabric. A 2015 study from Colloquy Loyalty Census Canada, run by Loyalty One — the operator of the Air Miles program — found Canadians have almost 130 million memberships, or an average of more than four per person. The retail sector accounts for the biggest chunk of membership at 48 per cent and it grew by 12 per cent in 2015.

“Canadians love their points programs. I spend a lot of my time travelling the world meeting with other program operators and looking at the structure of loyalty programs in different countries and Canada is probably one of the most developed loyalty program markets in the world,” says Bryan Pearson, chief executive of Loyalty One.

But Wiegard says there’s more than fun to points collecting. In an economy with low wage growth, people need the extra cash breaks wherever they can get them. Her 2016 gross purchases at Shoppers would have been $1,746 she says, but the coupons and redeemed points cut her spending to $1,078.

“I love the (Shoppers) program because I’m doing the best with that program as far as the money that will come back,” Wiegard says.

Consumers vary widely in how they collect points, some treating it, like Wiegard, as an exercise in strategy, while others are more passive about collecting the points. Navigating the divide, and pleasing all their customers, is the great challenge for loyalty providers.

“I once took a group of collectors out for dinner and I was talking about our program relative to others and I had this one guy who knew the terms and conditions and specifics of our program better than (I did),” Pearson says.

The other side of the coin is people who just swipe and collect points, figuring one day they’ll cash them in.

“The spectrum is similar to how any consumers react to different brands that are out there,” Pearson says.

If you have to trace the origin of the loyalty program in this country, it probably begins with Canadian Tire Corp., whose famed bills, adorned with the fictional character Sandy McTire, first appeared in the 1950s.

When Air Canada rolled out Aeroplan in 1984 as an incentive for frequent flyers it was one of the first real points-based programs. Coalition programs, which team up with multiple retailers and allow businesses to collect user data, started in 1991 with the introduction of Air Miles. By the late 1990s and early 2000s, single retailers like Shoppers started introducing their own brands.

But that loyalty comes at a price.

Air Miles has come under fire for its redemption program and some people maintain it is difficult to cash in the points that will begin to expire at the end of this year. At the end of 2011, Air Miles issued a five-year expiry date on reward points and, with the date now upon us, it somehow has caught some off guard.

Naturally, any change to a loyalty program risks challenging the very nature of why it exists — namely, to keep customers coming back to a certain brand.

Ken Wong, a marketing professor with the Smith School of Business at Queen’s University in Kingston, Ont., figures Loblaw probably wanted to roll the Optimum program into its own PC Plus rewards program, but realized it was going to face some backlash under a single banner.

That concern is not without precedent. When Air Canada swallowed up Canadian Airlines in 2000, it rolled its points program into Aeroplan and made the transition more palatable by including some elements of its formal rival’s Canadian Plus features, like the concierge program for its top-tier flyers, while also respecting their status level.

Shoppers officials say there are no plans to end the Optimum loyalty program despite the recent changes in the terms and conditions that have some consumers convinced its future is limited.

Jeff Novak, brand director for RedFlagDeals.com, said every time someone tries to change the terms and conditions on a plan they risk a major backlash.

“Aeroplan made an announcement they were going to start expiring miles and there was a massive uproar. There were threats of a lawsuit and they decided to reverse course,” Novak says.

Patrick Sojka, the founder of Rewards Canada, says that ever since Air Miles announced points would start expiring people have become “jumpy” about all of their rewards.

“Loblaws knows they can’t just end the program,” Sojka says. “They all put these terms in (saying they can end the program), but it doesn’t mean they will.”