If passed, proposed legislation would prevent companies offering loyalty reward programs in Ontario, such as Air Miles, from expiring customers’ collected points on a set date.
The Protecting Rewards Points Act, or Bill 47, was introduced by Ontario Liberal MPP Arthur Potts last month, and could become law in early December. If passed, the bill would make it illegal for companies to expire consumers’ unused reward points based on the passage of time alone. Additionally, the legislation would force companies to restore any points that expired on or after Oct. 1, 2016.
Potts says that he put forth the bill after hearing complaints about loyalty reward programs from constituents in his Beaches-East York riding.
“People were very upset by the fact that time was ticking down and they were going to lose their points,” Potts told CTV News Channel in an interview on Wednesday. “They were having difficulty redeeming points on the website. They couldn’t get live operators. I realized that there’s a real problem for consumers we needed to address.”
Potts is confident that the bill will pass after third and final reading on Monday, and hopes it will become law before Jan. 1, 2017, when Air Miles customers are set to begin losing points. Under the five-year expiry rule, consumers with unused points earned before 2012 will lose them in 2017.
“There has been a lot of support,” Potts revealed. “It’s going to happen in time. It’s a Christmas present to everyone.”
Potts said that executives from LoyaltyOne Inc., the parent company of Air Miles, attended a committee meeting on the issue at Queen’s Park on Tuesday. They expressed their opposition to Bill 47 and the expenses associated with making special provisions for only Ontario. Potts said he has met with them and that he has committed to working with them on creating regulations for expiring points in a “customer-friendly way.”
“There’s a legitimate reason why they need to expire points that are inactive,” Potts admitted. “We just need to find the right consumer mechanism that respects the consumer. It just can’t be on the basis of time.”
Natasha Lasiuk, a spokesperson for Air Miles, oppose the bill because they say it would negatively impact all customer-focused rewards programs operating in Ontario.
“If enacted, it will trigger negative implications such as immediate and long-term additional loyalty program costs, which will ultimately affect consumers who use those loyalty points,” according to a statement emailed to CTVNews.ca.
Lasiuk also suggested there is a risk of loyalty schemes that cross borders, such as hotel and airline reward programs, choosing not to operate in Ontario due to the legislative “burden” there.
Potts cited Aeroplan’s program of expiring the points of customers who are inactive for more than a year as a reasonable example. Under Aeroplan’s loyalty rewards program, consumers earn miles by making a purchase, then must redeem points or donate them to charity, at least once a year, to maintain an active membership.
Potts compared Bill 47 to legislation enacted in 2007, which banned the expiry of gifts cards in Ontario. He said the same principle applies to loyalty reward programs as gift cards. Potts said customers create equity by collecting points and they shouldn’t disappear without their permission.
“People have been collecting for over 10, 12, 15 years and to lose those years that go back beyond five years, was just unfair,” he said, urging other Canadian provinces to follow suit.
