Pointshogger on CityNews Talking about the New Bill Aiming to Stop Expiry on Reward Programs

Yesterday, we had a part in a news report by CityNews about the Liberal MPP’s bill to stop expiry of rewards points passes second reading

Putting a Stop to Expiry Policies

Remember back in 2007, the Ontario provincial government banned expiry dates on gift cards. Now they want to ban expiry policies of loyalty programs. Bill 47-Protecting Rewards Points Act has passed its second reading unanimously and without resistance. So I suspect that there is no stopping this!

As indicated in the news report, this move by the government is mostly due to the unhappiness with Air Miles. Seeing as this is only from the Ontario government, I am guessing that this will not affect companies that are headquartered in another province?

List of Headquarters

I did a quick research on some of the major Canadian loyalty programs and where they are based:

Loyalty Program

Headquarters

Aeroplan (Aimia) Montreal, Quebec
Air Miles (Loyalty One) Toronto, Ontario
Aurora Rewards (Canadian North) Calgary, Alberta
Esso Extra (Imperial Oil) Calgary, Alberta
PC Plus (Loblaws Companies) Toronto, Ontario
Petro-Points (Petro Canada) Calgary, Alberta
Plum Rewards (Indigo Books and Music) Toronto, Ontario
Scene (Cineplex Entertainment) Toronto, Ontario
Shoppers Optimum (Loblaws Companies) Toronto, Ontario
WestJet Rewards (WestJet Airlines) Calgary, Alberta
VIA Preference (VIA Rail) Montreal, Quebec
VIPorter (Porter Airlines) Toronto, Ontario

Pros

The only real pro is that we won’t have to worry about expiry policies anymore. This will be in line with Delta Air Lines’ SkyMiles program, as well as one of my favourites, Best Western Rewards.

Cons

However, something has to give. Loyalty companies need to make money, or else they will go bankrupt and no one wins. However, it’s no secret that they make a lot of money from expired miles and points. So if they were suddenly forced to change their expiry policies, then they will need to recover those lost earnings some other way.

I am going to expect things like:

  • Devaluations to reward programs
  • Elimination of sweet spots
  • Possible bankruptcies to reward programs, or mergers (which could be a good thing)

Conclusion

I can’t say that I am optimistic about this move, because I strongly suspect that loyalty companies are going to readjust their business model so that they can recover their lost profits somewhere else. I can’t really see how this ends well with customers looking to gain more value out of loyalty programs.

But I do understand that this will cater to the masses.

What are your thoughts about this new law?

4 Comments

  1. I think this would apply to any company that offers rewards programs to Ontarians, not just those headquartered there (though I’m not sure about companies that are clearly under federal jurisdiction, such as airlines, railways and banks).

  2. Government role should be to provide a level play field so companies can compete. Not sure how this will pan out adding more restrictions to the limited options available in Canada (vs USA) of program rewards.

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