No reward for loyalty

Any legislation that protects consumers from predatory practices is a good thing. So a private member’s bill in the P.E.I. legislature that would make it illegal for companies to let loyalty reward points expire is welcome news. Liberal MLA Chris Palmer says he introduced the legislation after hearing concern on the doorsteps in Summerside-Wilmot.

The issue that caused an uproar across Canada last year concerns the infamous Air Miles bombshell. People were outraged that some points they had saved up for years were going to expire unless used by January 1, 2017. Air Miles collected more than five years ago would be void.

Consumers panicked. They took trips, altered holidays and made snap decisions on big ticket items to get some value back on their points before it was too late. Peoples’ lives were thrown into a tizzy. Some consumers were blocked by Air Miles from purchasing products they wanted and were forced to accept other items instead. It was a mess.

Air Miles faced a growing storm of outrage and finally backed down in early December. The expiry policy reversal was cold comfort for customers who had rushed to redeem points to beat the clock.

Because of its ill-advised bungling, Air Miles estimated it would lose $250 million in ad revenue. Who pays? Yes, you guessed it, the consumer again. To make up for the losses, the company adjusted its offerings to collectors by lessening the value of the points collected.

That bad news came down in late January when the rewards program lowered the value of miles by about 20 per cent without informing collectors. Once again, customers were cheated. Such examples are spurring provincial governments across the country to introduce legislation like Mr. Palmer’s bill to protect the consumer.

This week, Quebec introduced plans to regulate loyalty programs such as Air Miles, starting with banning the expiration of points. Ontario has introduced similar legislation.

Mr. Palmer makes a good point when he suggests that not only will consumers benefit from his bill but retailers as well because many of them offer points to consumers as incentives. A consumer is more apt to shop with businesses which offer rewards, knowing those points are now secure. Mr. Palmer should also check his legislation to ensure companies can’t unilaterally devalue their points program without advance, written notice.

It wasn’t that long ago that some retailers — on P.E.I. and elsewhere — tried to impose an expiration date on gift cards. A card in your stocking under the Christmas tree could expire if not used by a certain time period, sometimes within a year.

It was a form of theft. A person buys a gift card and the company has the cash. Refusing to honour that card is unacceptable. The same applies to unilateral changes to Air Miles points and redemption options. We are cheated again.

The bill before the P.E.I. legislature is a victory for consumers, although for some, it’s like closing the barn door after the horses escaped.