The longer they wait, the more trouble they'll have.
Just two weeks ago, Canadian Imperial Bank of Commerce and Toronto-Dominion Bank set an Aug. 26 deadline for the details of their potential three-way partnership with Aimia Inc., the parent company of the Aeroplan loyalty rewards program.
That day has come, but there's no deal. Better yet, the two banks didn't commit to a new deadline. No one knows what to expect, and neither CIBC nor TD gave a timeline for when they expect a deal to be made – though Aimia says something should be announced by the end of August.
While the banks theoretically have some leeway because TD isn't set to take over the Aeroplan contract until Jan. 1, the reality is cardholders are already confused. Each passing day just compounds this problem.
For example, last night my family had a summer party. At these events I'm usually asked the same questions: What's going to happen to house prices and where do I think interest rates will go? (You get the level of sophistication of those asking the questions.)
Last night a new question was thrown into the mix: What's happening with Aeroplan and am I going to lose my account?
This wasn't the first time I've been asked this. My buddies, who are typically more concerned with who is at Hockey Canada's orientation camp in Calgary this week, have asked me whether they'll lose their cards and what they should do about it.
This is a problem. Ask any loyalty rewards specialist and they'll say the customer should always be the priority. Yet in the Aeroplan saga, a corporate contract negotiation has played out before the public and that has trumped the customer experience.
On top of that, the delays only give other card providers free reign to market their offerings. Look around and you'll see newspapers and websites are gaining credit card ads, which means these providers may attract new cardholders before the Aeroplan contract is even signed.
By no means is this doom and gloom for the two banks. CIBC and TD still have the power to set the record straight when (or if) a deal is struck. But no doubt, the longer they wait, the more they'll have to spend to clear the air.
(Tim Kiladze is a Globe and Mail Capital Markets Reporter.)
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