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Should Rewards Points Be Allowed To Expire?

Nearly a decade ago every province in Canada passed some form of legislation that banned expiry dates and most fees on gift cards and prepaid cards. Canadians spend nearly $6 billion annually on gift cards and these regulations ensure that consumers get the full value of their gift card no matter when they decide to use them.

The expiry ban does not apply to loyalty cards used to collect rewards or points. But, given the outrage over Air Miles’ new expiry policy, it might be time to amend the Consumer Protection Act with respect to rewards points.

That’s exactly what Ontario MPP Arthur Potts intends to do, with a private bill that looks to establish fair regulation of loyalty points programs in Ontario. Under the proposed amendment, any rewards points that expire on or after October 1, 2016 under a consumer agreement will be credited back to the consumer.

*Note: The committee will hold public hearings in Toronto on Tuesday November 29th and welcomes oral presentations or written comments.

Should Rewards Points Be Allowed To Expire?

Protecting Rewards Points

A win here would be good news for millions of Air Miles cardholders, many of whom will see their reward miles expire under the new policy as early as December 31, 2016.

Banning gift cards from expiring is a no-brainer under the Consumer Protection Act because gift cards are a form of currency – they’re paid for with real money and should be treated as real money when they’re redeemed. Cash doesn’t expire!

Loyalty programs, on the other hand, are a bit murkier because they deal in points or rewards. It’s not as clear what the cash value of those points is and whether they should be treated as currency.

MPP Potts argues that under a consumer agreement, such as the one you enter into when you sign up for a loyalty program like Air Miles, the supplier provides rewards points to the consumer when he or she purchases specified goods or services or otherwise acts in a manner specified in the agreement.

Much like buying a gift card to be redeemed later for goods or services, it’s only fair that rewards points should be available to be redeemed whenever the consumer decides to use them.

When Air Miles introduced an expiry policy back in December 2011, it changed the rules and stated that all reward miles would be given a time stamp and expire if unused after five years.

Despite rampant pressure in the media and from collectors, the loyalty company isn’t backing down. In fact, one could argue that Air Miles has made it increasingly difficult for collectors to redeem their miles as the first expiry date draws near. Customers say the website is down intermittently, it’s difficult to navigate, and rewards are hard to find. Meanwhile, call centre wait times are measured in hours if you’re lucky, but sometimes it takes days to get through to a live person.

Not only that, Air Miles charges excessive fees to transfer reward miles to another collector – 15 cents per mile. Let’s say a collector whose reward miles are about to expire decides to transfer 10,000 miles to a friend or family member. It would cost $1,500, plus a $10 service fee, plus applicable taxes. That’s more than the reward miles are worth!

Final thoughts

The private bill to protect rewards points sailed through two readings and is now before a standing committee. There’s also the proposed class action lawsuit put forward by JSS Barristers, which alleges that contrary to the reasonable expectation of Air Miles’ program members, earned miles will soon expire as a result of a change by Air Miles in the program’s terms and conditions. In addition, Air Miles has made it much more difficult for program members to redeem their earned miles before they expire, and made it much more likely users’ miles will expire.

An Air Miles collector might spend upwards of $300,000 to earn 20,000 reward miles. Those miles can be exchanged for travel, merchandise, or other rewards that are worth somewhere between $2,000 and $3,000. Expiring those reward miles would cause financial harm to this collector and contravene the consumer agreement to which he or she entered.

My hope is that government and or legal intervention will prevent loyalty programs from slapping expiration dates on their rewards points. Consumers act in good faith and spend real dollars to earn points that they expect to redeem for money, goods, or services. That’s why rewards points, just like gift cards, shouldn’t be allowed to expire.

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12 Comments

  1. Valerie on November 28, 2016 at 6:56 am

    I decided to quit Airmiles after this fiasco! Like many other things in our world today, nothing is really FREE. The time it has taken me to get my “reward” is ridiculous. Then I ended have to just buy anything to use up my points. Getting something I really do not need. ITS CALLED A ‘RACKET’

  2. Edward Gonsalves on November 28, 2016 at 8:11 am

    This law is overdue

  3. Barbara on November 28, 2016 at 8:38 am

    I have still not used my Dream Air Mikes I have because there is nothing that I want that they offer!! I have been a very loyal Air Miles collector and this is so maddening, I certainly hope they pass this new bill
    this week and credit back my air miles somI can actually use them for something I want. It was “my” money from “my” spending that incurred these air miles very methodically. If they expire that is theft &
    where is the loyalty in that??

  4. fbgcai on November 28, 2016 at 9:05 am

    simple solution – dump the disloyalty program know as Air Miles and boycott all establishments that deal with them.

  5. Claire on November 28, 2016 at 10:58 am

    I managed to use up the last of my Dream Air Miles on an item I didn’t especially want but could at least make use of. This was after making multiple visits to the site and discovering that the only items of interest would require my paying cash on top of the Dream Air Miles. Can’t imagine why anyone would do that.

    I also looked up a number of the items available with Dream Air Miles only and found that they tend to be older-model and/or discontinued items. While this isn’t always a bad thing (sometimes older models are better), it leaves a bad taste in the mouth. Is the Dream Air Miles program nothing more than a dumping ground for unwanted merchandise?

  6. Joe Visconti on November 28, 2016 at 2:45 pm

    I will be making a comment to the legal firm handling the class action lawsuit. Your readers might be interested in responding to them by way of comments as well. Here is the link, classactions@jssbarristers.ca When you see this page, there is a link to this lawsuit. This is an absolute sham. I have been an Air Miles holder for many, many years and it has become more and more difficult to obtain miles, not to mention get in touch with the people at Air Miles when you need information.

  7. E. Cozzi on November 28, 2016 at 6:19 pm

    Air Miles is my least favourite rewards program and I won’t be going out of my way to collect them in the future. I’m trying to use up my Dream Miles before they expire and wanted to fly my daughter from Vancouver to Calgary in December. The Air Miles site which is not very user friendly tells me that no flights are available! So I went to the Aeroplan site and used my Aeroplan miles to secure a reward flight with absolutely no difficulties!
    Like many others I can’t find much on the Air Miles site that I want, and when I do find something it isn’t available. Looks like the Air Miles strategy is to frustrate collectors so that their miles expire unused!

  8. Stephan Vanderende on November 28, 2016 at 7:33 pm

    Absolute ripoff; when you issued the card did you state that the points would expire????

  9. Christine Spence on November 28, 2016 at 11:10 pm

    At a bare minimum Air Miles should include an option to donate points as other prograns offer.
    Plus the ability to transfer shouldn’t cost anything.
    This was supposed to be a loyalty reward program.
    It took me 15 years to collect the measly 2 points at a time that now total an amount that i can’t get a flight for.
    They must only be allowed 2 seats per week.
    Other rewards programs also allow transfer of points to other non related programs building on each others brand.

  10. Kate on November 29, 2016 at 11:49 am

    This is really interesting – I wasn’t aware of this motion. I’ll be following it closely!

  11. Carol on November 29, 2016 at 12:09 pm

    I ended up using my expiring air miles for a couple of nights in a hotel – easiest way I found to use them.

  12. gary on November 29, 2016 at 2:19 pm

    all there is, is crap to choose from in the dream rewards. i used to get gift cards but they are no longer available. after many years of collecting i no longer carry the card. good luck to those with expiring miles; you’ve been had —- unfortunately.

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