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Air Miles makes changes to loyalty program in effort to retain customers

The changes, which will go into effect April 3, were decided upon based on customer feedback, according to Air Miles

After issuing an apology earlier this month saying that it "did not live up to" its relationship with members, Air Miles is making changes to its loyalty program in an effort to hold on to customers.

The changes come on the heels of Air Miles' cancelled plans to make miles expire after five years. As it approached the end-of-year deadline to begin this expiry policy late last year, it faced complaints from members about the policy and about extremely long wait times for customer service, as well as a new law passed in Ontario to ban points expiry in loyalty programs. After the policy was changed, members complained about having rushed to use up miles before they expired – sometimes on rewards they didn't really want. Retailers ran fewer promotions with Air Miles at the end of last year, and members' card use also dropped.

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On Monday, the company announced three changes.

  • Air Miles is extending its customer service support on Twitter and Facebook, saying that it will be possible to contact the company through those channels 24 hours a day. Until now, customer service would only respond through those channels during the day and early evening Monday to Saturday.
  • All of its merchandise rewards will be visible to all members. Before, its “gold” and “onyx” level members could redeem for products not available to lower-level collectors. Now, all merchandise is available to everyone, but “gold” and “onyx” members will see 10-per-cent-to-20-per-cent discounts on those rewards.
  • The program is expanding the amount of rewards merchandise that members can purchase with a combination of miles and their own cash, as opposed to having to wait to accrue the total miles needed. About 40 per cent of merchandise will be available for purchase with a combination of miles and cash, compared with last year when less than 15 per cent of merchandise rewards could be acquired that way. (However, some members may not view it as an improvement to have to spend money to get the rewards they want.)

One change some members have asked for is not happening, however. In 2011, Air Miles introduced a new category of "cash" miles that offered $10 cash back at checkout at participating retailers for every 95 miles collected. Miles redeemed for travel, merchandise such as appliances and jewellery, and experiences such as concert tickets or dining, were renamed "dream" miles – everything collected before 2011 fell into that category. At that time, collectors could decide whether they wanted to collect "dream" or "cash" miles – or a bit of both – from that point on. But the company did not allow collectors to convert one type of mile to another. Those who do not have enough "dream" miles to redeem for anything they want cannot convert them to "cash." The company said on Monday that this is not changing.

The changes, which will go into effect April 3, were decided upon based on customer feedback, according to Air Miles.

"We need to apologize for where we let collectors down. We need to own our shortcomings, and be transparent about it and make a commitment to be better," Blair Cameron, senior vice-president at LoyaltyOne who oversees Air Miles operations and strategy, said in an interview with The Globe and Mail last month.

In addition to Monday's announced changes, Mr. Cameron said last month that the company is also planning more promotions, such as a cruise giveaway later this year, to repair its relationship with members.

The program's retail partners also felt some pressure from shoppers unhappy about the expiry policy and Air Miles customer service surrounding it last year. "Our customer wasn't happy [with] the way the partner managed that relationship with them," François Vimard, then interim chief executive officer of Sobeys parent Empire Co. Ltd., said on an analyst call in December. "It did affect us directly."

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