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
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