A draft report posted on the ACCC's website earlier this month highlights a number of issues around customer loyalty schemes including concerns that companies touting these schemes are using them primarily as a portal to gain consumer data and insights as opposed to rewarding their consumers' allegiance.
The draft report released by the ACCC on 5 September 2019, available here, follows a review of customer loyalty schemes available in Australia – schemes which are particularly prevalent in the airline, supermarket, credit card, hotel and rental car industries.
Key concerns highlighted in the report include:
Membership of loyalty schemes is voluntary and generally free of charge to consumers, but it appears that it is often companies rather than consumers that are reaping the rewards.
So now that they are on notice, what can businesses that run loyalty schemes do to reduce the possibility of being subject to enforcement action down the line?
The ACCC has suggested a range of draft recommendations, some of which would require legislative reform in order to be implemented. Steps businesses can implement to enhance the credibility of their loyalty schemes in the meantime include:
Relevant stakeholders have been invited to make submissions in response to the draft report by 3 October 2019 with a view to releasing a final report before the end of 2019. Further details on how to make such submissions can be found here. The team at Bird & Bird in Sydney are well equipped to assist retailers with preparing submissions you may wish to make.