Ontario and Quebec Set to Update Legal Requirements on Loyalty Programs
There has been uncertainty in Canada with regards to whether consumer-incentive programs involving loyalty or rewards points fall under the scope of provincial consumer protection laws, given their free nature. Loyalty programs encourage consumers to be loyal to a specific merchant in exchange for the opportunity to obtain goods and services either at a discounted price or for free or for other exclusive offers. In return, merchants that offer these loyalty programs often gain repeat customers and valuable information from consumers’ purchasing habits.
In many cases, loyalty programs are linked to consumer accounts or contracts which themselves are covered by consumer protection laws. In recent years, Aeroplan and Air Miles announced miles and points older than a certain number of years would expire, but both ultimately opted to abandon their plans in the face of consumer backlash. Recently, growing consumer concerns have prompted provinces to enact legislation prohibiting expiry dates on gift cards (prepaid purchase cards). Regulators have now become more interested in consumer rewards programs and have pushed to amend consumer protection laws to cover them.
The recent legislative changes regarding loyalty programs that have been enacted in Ontario and proposed in Québec provide more insight into how loyalty programs will be regulated moving forward. With the legislative changes in Ontario and proposed in Québec, it is clear that consumer laws will now apply to loyalty programs in these two provinces.
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This content has been updated on November 20, 2017 at 20 h 05 min.