How rewards programs like Air Miles could appease angry customers

There's no question that Air Miles is facing a public relations battle.

As customers rush to redeem their miles before the looming expiry date, many continue to be frustrated with the programcomplaining about everything from the expiry date itself to limited rewards options for aging miles.

"I'm just going to throw the card away," Toronto Air Miles collectorJohn MacKenzietold CBC News, after failingto find a satisfactory way to use up his points.

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This isn't the first time anexpiry rulehas generated a consumerbacklash. In 2013,Aeroplan backtracked on a plan to implement an expiry date for all points following customer complaints.

The travel rewards programis also facing two lawsuits,one a class action, over a separate expiry rule it didn't nix.

One possible solution to avoid such customerfurorin the future would be for rewards programs to adopt clearly laid out industry-wide rules, especially for when they slap on an expiry date.

"Put it in bold print, really tell people what they're possibly facing," advised Lindsay Meredith, a marketing professor at Simon Fraser University."And then if they want to play under those rules, fine, they've been forewarned."

Canada's Public Interest Advocacy Centre (PIAC) has been calling for industry-wide guidelines for rewards programs since 2013.

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"This is a very hodgepodge, hit and miss kind of area," said PIAC's Jonathan Bishop. "There's no certainty for the consumer."

PIACwould also like to see an independent complaints commission that consumers can turn to when they have beefs about their rewardsprogram.

Establishing industry standards would benefit not only consumers, but could also help loyalty programs keep current customers and entice new members.

"Why the hell would they start using your product when it looks like there's big trouble trying to play the game with them?" asked professor Meredith.

Changing the rules of the game

PIAC would like to see blanket guidelines for notifying customers when rewards programs changetheirpolicies, such as devaluing the points customers earn or introducingan expiry date.

"There's no rules around a notice period," Bishop said.

Air Miles saysit gave customers plenty of notice that miles older than five years would start expiring in 2017. In late 2011, it noted the comingchange near the bottom of a news release about a new cash rewards program.

Since then, it has posted information online for customers."We have made expiry information very easy to find on our website," spokeswoman Natasha Lasiuksaidin an email last month.

Until recently, collectors had to navigate the website's FAQ section to learn details.

In late July,Air Milessent an emailto customerswarning about the comingexpiry date. It also now posts the news in a pop-up message on its site. The move followed stories by CBC Newsabout the rule changeandcustomer frustrations.

Aeroplan battles lawsuits

Aeroplan is facing two lawsuitsover a changeto its expiry rules.

One is aclass action where more than 7,000 members have signed on across Canada and the second was launched by a single customer in B.C.

In late 2006, Aeroplan announced that starting July 1, 2007, members would lose all their miles if they didn't add or redeem points at least once over 12 months. Expired accounts could be reinstated for a fee.

The lawsuits allegethe rule change was a breach of contract and that customers didn't receive adequate notice.

Mississauga Aeroplan customerSteve Woloshyn says he joined the class action after 365,000 points were wiped from his account due to 12 months of inactivity.

"I was shocked," said Woloshyn, who had been saving his miles to take his wife to Australia and says he didn't know they were at risk of expiring. "It was like somebody deflated my balloon."

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Aeroplan's owner, Aimia, says it believes it has strong arguments to get the class action dismissed.

"It has always been our aim to ensure that Aeroplan's terms and conditions remain not only fair but are clear to members,"Aimia spokeswomanChrista Poolesaidin an email to CBC News.

"Expiry policies are very common in the loyalty and frequent flyer industries."

Even so, newly introduced onescontinue to outrage many customers, especially if they learnedthe news late in the game. But if there was a clear, standard policy for how members must be notified, perhaps companies could avoid some of that outrage and messy legal battles.

Rules of engagement

Air Miles is also facing a customer backlash after some collectors compared their membership accounts anddiscovered the company makes different rewards available to different customers.

"I have never felt so cheated by a company," saidAshlea Langevin of Ottawa.

Air Miles told CBC News it bases rewards selections on a collector's past purchases and level of engagement with the program. The company contends this formof "personalization" has becomestandard industry practice.

But perhaps it should also be standard industry practice to reveal this information to customers when they choose their rewards.CBC continues to receive angry emails from collectors, including one who told us,"This is despicable."

Sure, rewards programs are under no obligation to establish industry-wide standards. But, as PIAC points out, the effort could wind upa win-win situation where rewards programs generate more customer loyalty.

"The more confident consumers are" in understanding the rules of the game, said Bishop, "the more confident they are to participate in the program."

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