- Rewards points in Ontario wouldn’t be allowed to expire, and;
- Any points that expired on or after October 1, 2016, would have to be reversed.
This is clearly a response to Loyalty One’s Air Miles new five-year expiry rule, to start January 1, 2017. Personally, I think it’s a wretched bill that would be bad for business and consumers.
Is this a good idea?
I believe in the freedom of contracting. People ought to be able to agree to whatever they want (of course within limits). In the case of rewards program expiry, you are either expressly agreeing to that expiry rule, or are agreeing for the introduction of an expiry clause in the future. In this case, personal freedom to contract ought to prevail.
The bill ignores the financial reality of rewards program. These programs have created a pseudo currency, subject to the same market forces as any other currency. Look at Aeroplan – as they issue more miles through their new TD joint-venture, they had to devalue their award chart. By banning expiry terms and re-introducing millions (billions?) of miles that were expired, market forces will drive the value of the “currency” down accordingly. Sure, you might get your miles, but Air Miles might just dramatically increase the value of their rewards, creating an aggregate loss or status-quo of utility.
As noted in the CBC article, having a single province ban rewards points expiry makes for a logistical nightmare for loyalty programs, further increasing operating cost and decreasing the value of their currency.
Finally, on a personal moral perspective, people really ought to take responsibility for their own points. Air Miles gave plenty of notice of their new expiry rule, and giving a five-year lifespan for a point is perfectly reasonable. Many people in the points community use the mantra “earn and burn,” because points don’t earn interest and only deflate in value. Points holders should be responsible enough to monitor their accounts, updated terms that are widely announced and publicized, and very basic economic principles.
What do you think about banning expiry clauses in loyalty program contracts?