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Loyalty Program Reforms

Posted by Kirsten Lowis on 9 September 2019
Loyalty Program Reforms

Loyalty program practices are under scrutiny, according to the Australian Competition and Consumer Commission's (ACCC) 2019 compliance and enforcement priority into competition and consumer issues relating to customer loyalty schemes.

With a focus on major customer loyalty schemes in Australia, the ACCC released a draft report of findings and recommendations along with a commissioned expert report announcing its intentions to prioritise "competition and consumer issues arising from customer loyalty schemes in Australia as a focus area in 2019".

The ACCC's corporate lawyer Richard Prangell recommends that any business should check their loyalty program practices.

"The biggest recommendation it has made is ultimately there will be greater communication between retailers and customers.
"Businesses should take great care about the kinds of benefits that may be offered, and if there are any changes, they should communicate very clearly how those changes will affect the customers."

"The objective of this review by the ACCC was to gain a better understanding of the collection, use and disclosure of consumer data, and the terms and conditions of these loyalty schemes," which affects the average Australian who subscribes to between 4 6 loyalty programs.

"Having placed the industry on notice, the ACCC encourages consumers to contact us and report concerns where these practices are continuing with their customer loyalty schemes," he added.

"The loyalty business function often takes the lead role within consumer companies in capturing, harnessing and, in some cases, monetising customer data," the report reads.

Mr Prangell warned all small to medium business owners to keep an eye on the law reform and continue to make sure their loyalty schemes remain compliant to avoid hefty fines.

Submissions in response to the draft report are due 3 October 2019. More information can be found HERE

Kirsten LowisAuthor:Kirsten Lowis
About: As the Founding Director of Zoom in Business - a subscription-based network and magazine, NQ Business Sales - a business sales firm based in North Queensland, and Bizrich - a business valuation firm, Kirsten has learnt from the trenches and brings a wealth of personal and professional experience and knowledge to our members. With over 13 years as a franchisee, retailer and start-up business owner, Kirsten has worked closely with fellow coaches, hundreds of clients and the best facilitators in Australia who have run their own business or have experience in running a business and teams. Kirsten’s extensive knowledge and experience as a Registered Business Valuer and Licenced Business Broker helps our readers and members improve awareness of the state of the market, understanding and confidence in buying, growing, valuing and selling their business, while connecting them with local and international news stories and experts to create a capable and dynamic business network.
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