The Meeting Place

Loyalty schemes under the microscope

Improvements to customer loyalty schemes and broader legislative reforms are required to protect consumers using loyalty schemes, according to the ACCC’s final report into customer loyalty schemes released on Tuesday.

The report recommends loyalty schemes, such as frequent flyer, supermarket and hotel operators, better inform consumers, improve their data practices and stop automatically linking members’ payment cards to their loyalty scheme profiles. It also calls for broader changes to consumer and privacy law.

“We are calling on companies that offer loyalty schemes to improve both their data practices and how they communicate with consumers, to help consumers understand how these programs operate,” ACCC Chair Rod Sims said.

“Even simple changes, such as more prominently alerting customers that their points are about to expire, for example, in the subject line of an email, could help prevent a consumer from losing points earned over several years.”

The ACCC is also concerned that the profiling of consumers based on the data collected by some schemes, including through the sharing of consumer insights with third parties, could result in consumers receiving increasingly targeted advertising. This could also potentially result in different consumers being offered different prices for an identical product or service.

“Many consumers are increasingly concerned about receiving targeted advertising, in some cases from companies that they have never dealt with before,” Mr Sims said.

“There is also an emerging risk of real consumer harm if individual consumers were to be charged inflated prices based on profiling derived from their data. For example, if a person’s frequent flyer data or online search history indicates they can only travel on certain dates, or otherwise based on their income, geographic location or other information collected through the loyalty scheme they may be charged extra.”

Another major concern with loyalty schemes are privacy policies that are very vague and seek broad consents and discretions from consumers about how they’re going to collect, use and disclose their data.

“Many consumers would be shocked to find that some supermarket schemes continue to collect their customers’ data at the checkout even when they do not present their loyalty cards. They do this by tracking customers’ credit or debit cards from previous transactions,” Mr Sims said.

“When a customer chooses not to present their loyalty card, we think it is reasonable that they would not expect their data to be collected for that transaction, and we are therefore calling on the relevant schemes to stop this practice.”

While some loyalty scheme operators made changes after the ACCC commenced its review and released its draft report, the ACCC remains concerned about certain practices that a number of loyalty schemes continue to engage in.

The ACCC’s report reinforces recommendations from its Digital Platforms Inquiry Final Report regarding privacy and consumer law.

”We also recommend that unfair contract terms be prohibited, rather than simply being voidable, and that a new law against certain unfair trading practices be considered,” Mr Sims said.

Our recommendations would protect consumers and help ensure consumer trust in loyalty schemes, in the digital economy and in data-based innovation, which is a benefit for the broader economy.”

The ACCC encourages consumers to report concerns regarding the practices of their loyalty schemes.

Do you use a loyalty card at your supermarket? Have you been targeted by advertisers as a result? Should the whole system be better regulated?


I cannot see why the life of Loyalty Points should expire ...after all according to their claims the points are worth some money and the store gets use of them without paying interest.

loyalty schemes are just a way of keeping check on what you do and buy

Flybuys no longer have an expiry date and you also have longer time touse  gift cards too.

Flybuys no longer have an expiry date and you also have longer time touse  gift cards too.

Qantas cancelled 170,000 points from my frequent flyer account without notice, when I contacted them to explain why I was not alerted to this impending action they e mailed me to apologise and to say no system is perfect but cannot reinstall the points, I have been a member since 1985, so much for loyalty.

They are just a rippoff. If you think you are getting something for free , think again. The costs are built into the system. Its a business, remember! They are there to make profits for shareholders, not you!

When you purchase from a Supermarket & pay by either cash or card, you pay the same total amount of that transaction if you just simply zapped a Loyalty Card. But by using a FREE loyalty card at the check-out, you gain points that really represent a discount when redeemed. So, why throw away a guaranteed discount that you say is "just a ripoff" when it costs nothing & virtually no effort to use ?

I only belong to 2 loyalty schemes ... both for businesses found locally, that I shop at regularly because of convenience. 

The 'loyalty' discounts and periodic $10.00 off bonuses suit me because I would be spending there anyway.

I say no to the plethora of other shops who offer loyalty schemes/cards ... wouldn't have a wallet big enough LOL ... and can well do without the copious promotional emails that spew forth after joining.

You could always open an extra email address specially for promotional emails ??

I just don't want promotional emails Suze, no interest in most retailers, except the two I have loyalty schemes with.

I seldom buy stuff but when I actually need/want something I do a quick price comparison online. Guess I'm just not a sales/specials chaser.

don't know what the fuss is about. I have $50 at one supermarket chain as well as $20 at another just sitting there waiting for me to use. I didn't go out of my way to acrue this, just bought my weekly groceries. What do you all want for nothing. I know that greed is a popular philosohpy.


inquisitive,    exactly,    did my shop at coles  last friday,    and $40 of my order,    like you,   i dont go out of my way,   but carying a card isnt hard,     and why not get some benefit,    it all helps,  

I don't even carry the cards now. I have an app that stores all my cards at all the shops I infrequently use and once in a while My points give me a surprise  freebie..... and that adds a little joy to the shopping experience.....and yes I do get slightly annoyed by the coles emails that tell me that some  of the things I buy there are on' special' otherwise though I may not know.


but the warning that in the future, the prices may start to target you is a worry. I recently used a website to consider some accommodation for a trip.... wanted some time to think about it..... when I went to book a couple of days later, it had risen in price, using another browser but the same website, the price was the price from the previous time..... sneaky heh!!!!



Interesting but scary ... and sneaky as you say. Thanks Red.


Why not cancel/unsubscribe the Coles emails if they annoy you ?

Personally I do not mind if they remind me that some of the items I buyregularly are on Special.