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Ontario’s Ministry of Government and Consumer Services made changes to the wording of its regulations in response to consultations it held with industry and the public last March and April. The legislation was inspired by consumer backlash to a 2016 announcement from LoyaltyOne’s Air Miles program that it planned to void any miles five years or older.

Earlier this year, Starbucks Corp. changed the way it administers its loyalty program in Ontario, taking on extra costs to ensure that its rewards points in the province do not expire.

The move was a response to an amendment to Ontario's Consumer Protection Act last December that banned the expiry of loyalty points in most cases. It was a better-safe-than-sorry approach for the coffee chain, as it awaited the wording of final regulations that will dictate how the law operates going forward.

Those regulations, which go into effect on Jan. 1, would allow Starbucks to reinstate its points expiry, because the wording clarified that the law does not apply to programs in which rewards have a value of less than $50.

The $50 threshold is just one of the changes that Ontario's Ministry of Government and Consumer Services made to the wording of its regulations in response to consultations it held with industry and the public last March and April. The legislation, which follows a 2007 ban on expiration dates on gift cards, was inspired by consumer backlash to a 2016 announcement from LoyaltyOne's Air Miles program that it planned to void any miles five years or older. The company later cancelled those plans.

According to the submissions made by companies and industry representatives, provided by the provincial ministry in response to a freedom-of-information request, the Canadian Marketing Association – which represents nearly 400 companies and organizations – specifically requested the $50 threshold.

The CMA was "trying to level the playing field at the low end of the marketplace where there are lots of programs involving stamp cards and so on," said Wally Hill, vice-president of government and consumer affairs. "We had been concerned that the [law] had come forward without a lot of consultation, and we were pleased that there was a good consultation to ensure that the changes did not create an unwarranted, weighty form of regulation."

One request by the CMA that was not granted was for a longer period of time to implement the law – to give companies time to adjust. In the consultation proposal, the government suggested a 45-day period from the implementation of regulations for businesses to comply. The CMA called this "totally inadequate" since compliance would involve redesigning information systems and processes, communicating changes to members, and other work. It urged a timeline of "no earlier than six months" from the publication of regulations.

Instead, the regulations go into effect just over 70 days after they were published.

Mr. Hill said companies have already begun preparing, and noted his hope that the government would take "an appropriately measured approach to enforcement" in the early months of 2018. LoyaltyOne, which runs the Air Miles program, also asked for a longer lead time of 90 days, but said it had no concerns with the regulations. Cineplex Inc., which operates the SCENE loyalty program, called the proposed 45-day timeline "not realistic" in its submission, but spokesperson Pat Marshall said that since its program rules already comply with the law, it is not concerned about the timing.

Another common request was that third parties whose business involves building or managing the infrastructure of loyalty programs for brands should not be subject to the law; but that the company whose brand the loyalty program falls under is responsible for its terms. This was a specific request made by the Canadian Bankers Association, and by Aimia Inc., which operates the Aeroplan loyalty program but also administers other programs for some brands, such as MyHusky Rewards for Husky service stations.

That suggestion was heeded: The final regulations state that the law does not apply "if the supplier … does not direct or control the expiry of the rewards points."

"We're satisfied with that language, but we also recognize that we have to do due diligence and only partner with rewards operators that have a good track record," said Dave Bauer, a spokesperson for the Canadian Bankers Association.

A number of industry representatives also stressed to the government that loyalty points should still be allowed to expire if a member's involvement with the program – in the form of activities such as earning or redeeming points, for example – lapses. This provision was already included in the government's proposed wording for the law, and was included in the final regulations: The law as proposed was to ban expiry due to "time alone."

"The purpose of loyalty programs is to encourage frequent spending with a particular business and it is essential for a business to state that reward points will expire if spending does not materialize," the Greater Toronto Hotel Association and Ontario Restaurant Hotel and Motel Association said in their submission. The Canadian Bankers Association made a similar request in its submission.

Marriott International Inc. made a similar request, and said the existing terms for its Marriott Rewards program are sufficient since it requires that members are active in the program at least once every two years.

WestJet Airlines Ltd. has made some changes: Until June, its rewards program included a provision for WestJet dollars to expire after five years, unless members paid an extension fee of around $50 to keep them. On June 6, that policy changed so that most of its dollars do not expire. Dollars that are awarded through exempt activities such as limited-time promotional offers will still have expiry dates.

Ontario's law "compelled us to review our policies but we made the decision based on what was best for all of our members, wherever they live," spokesperson Lauren Stewart said.

The legislation did not address some concerns in the submissions: for example, some companies noted that it was not clear what happens to points when programs merge. The Public Interest Advocacy Centre said in its submission that the lack of clarity around what happens to loyalty points after a member's death is "potentially a huge missed opportunity." PIAC also stressed the need for clarity on whether loyalty points can be effectively "devalued" through other measures.

"It is good as far as it goes but only goes so far," said John Lawford, PIAC's executive director and general counsel. "… There are other potential consumer injustices than points expiry."