The Government of Ontario has released a public consultation regarding regulations related to the new prohibition on expiry of rewards points issued to consumers. The consultation document, which is available here, includes commentary from the Government and proposed regulatory text. Comments are due by April 28, 2017.
On December 8, 2016, the Government passed legislation to amend the Consumer Protection Act, 2002 to prohibit the expiry of rewards points due to the passage of time alone (the Pending Amendments). The Pending Amendments, once they are in force, will also require suppliers under rewards programs to credit back to consumers points that expired between October 1, 2016 and the date that the law comes into force.
Consultation paper and proposed regulations
The consultation document includes commentary and proposed regulatory text on the following topics. The public is asked for views on these topics and any other input or suggestions.
What are rewards points?
The consultation document states that the concept of “rewards points” covers any partial progress a consumer makes as a result of the consumer’s transactions with a supplier towards a future entitlement to money, goods or services. The proposed regulation would include a broad definition of rewards points. It would not matter what words are used to express the partial progress – the key question is whether the progress towards a future benefit may be earned over multiple transactions. It is noteworthy that the proposed regulatory text does not include the word “value” but uses the words “partial progress” instead.
The proposed regulation would exclude from the definition of rewards points offers for a specific good or service if the good or service is identified at the outset of the offer. According to the commentary, this exception is meant to exclude, by way of example, offers such as coffee cards under which every tenth coffee is free.
Clarification of time-alone expiry
The consultation document includes a discussion of what is a reason for expiry in addition to the passage of time alone and notes that the additional reason must be a substantive factor and not a disguised means of expiry for time alone. The proposed regulatory text provides that the failure of a consumer to ask for their points to not expire is not sufficient as a reason in addition to time alone.
Carry-over of points to new rewards programs following termination
The consultation document provides that in certain scenarios, a supplier will be required to reinstate rewards points under terminated agreements, if the supplier terminates rewards agreements and then reinstates them or creates new substantially similar rewards agreements. The intent of this proposed provision is to prohibit businesses from implementing time-alone expiry of rewards points in an indirect way.
The consultation document proposes that the final regulations will be published 45 days before the Pending Amendments and the final regulations are proclaimed into force.
What your business should do now
If your business provides rewards points (or any accumulated progress towards a benefit that may be earned over multiple transactions), and you have comments on any aspects of the proposed regulations or the proposed implementation period, you may consider submitting a response to the consultation. Responses are due by April 28, 2017.
If rewards points provided by your business expire due to the passage of time alone, you should be prepared to credit consumers for such points that expired between October 1, 2016 and the date the legislation comes into force, unless an exception applies.