CON­SUMER PRO­TEC­TION ACT WILL AF­FECT LOY­ALTY SCHEMES

Weekend Argus (Saturday Edition) - - GOOD WEEKEND -

Loy­alty pro­grammes will have to be over­hauled ahead of the Con­sumer Pro­tec­tion Act (CPA), which will come into force in Au­gust next year.

Ina Meir­ing, a di­rec­tor at Werks­man Ad­vi­sory Ser­vices, says key as­pects of ex­ist­ing pro­grammes will need to com­ply with the Act by Au­gust next year.

For ex­am­ple, she says, loy­alty pro­grammes com­monly im­pose lim­i­ta­tions on when, how and what goods and ser­vices you can ex­change for loy­alty cred­its. Typ­i­cally, goods or ser­vices, such as flights are ‘sub­ject to avail­abil­ity’.

“Un­der the CPA, com­pa­nies have a duty to en­sure that the goods or ser­vices of­fered to you in loy­alty pro­grammes are in stock. Com­pa­nies will in fu­ture be al­lowed to im­pose re­stric­tions on avail­abil­ity only if they fol­low the cor­rect pro­ce­dure,” Meir­ing says. This will en­tail giv­ing you ad­vance writ­ten warn­ing that a prod­uct or ser­vice will not be avail­able for a cer­tain pe­riod, and that pe­riod may not be longer than 90 days.

Loy­alty pro­grammes will also be pre­vented from im­pos­ing any charge for ad­min­is­ter­ing, pro­cess­ing or han­dling a loy­alty pro­gramme trans­ac­tion if the con­sumer is re­quired to pay a pe­ri­odic fee to re­main a mem­ber of the pro­gramme.

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