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ACCC slams loyalty schemes


Senior Member
Aug 21, 2011
My Map
The ACCC today released a draft report expressing "significant concerns" about loyalty programs in Australia. Concerns include the expiry of points, loyalty programs making unilateral changes such as reducing the rate at which points are earned or redeemed, carrier charges on frequent flyer award bookings and privacy issues.

The ACCC has invited comments on the draft report until 3 October.

The competition regulator has warned businesses over their frequent flyer, supermarket and credit card loyalty programs, saying there is poor disclosure of the benefits of schemes and how customer data is shared with third parties.

"Most people think they are being rewarded for their loyalty with discounts or points, but in reality, some schemes are building up detailed profiles about consumers and selling those insights," Australian Competition and Consumer Commission chairman Rod Sims said.

Companies were "not even trying to tell you who else gets your data or what is happening to your information," he warned.

Mr Sims made his comments on Thursday after the Australian Competition and Consumer Commission (ACCC) released a draft report examining loyalty schemes. It found some companies described their data and privacy policies in "opaque terms" that made it hard for consumers to make informed choices.

Consumers had to understand they were not simply entering into a deal to obtain points or another type of reward, but into an agreement where they sign over their personal data, Mr Sims added.

"Consumers may be shocked to find that some schemes collect their data even when they don’t scan their loyalty cards."

The ACCC also criticised the poor wording of some benefit programs that failed to explain how schemes worked or notify customers of any reductions to benefits.


Active Member
Nov 7, 2009
All seem like reasonable complaints. You could add to that the difficulty of redeeming flights (website errors, incompetent call centre operators, etc etc).


Senior Member
Feb 21, 2006
My Map
There should really be no doubt that loyalty schemes are generally 'bad', ie designed for the company benefit not the consumer. But as pauly7 alludes to above, for educated consumers there are ways to work the schemes to our benefit. The ACCC are likely to consider the masses, not the educated consumer.

Captain Halliday

Established Member
Jun 1, 2014
They could have just said AMEX:

“...some operators of loyalty schemes... made unilateral changes that unfairly restricted the benefits available under a loyalty scheme, for example, by unilaterally reducing the rate at which they could earn points, or the value of their points previously accumulated.”


Established Member
Dec 8, 2004
There should really be no doubt that loyalty schemes are generally 'bad', ie designed for the company benefit not the consumer. But as pauly7 alludes to above, for educated consumers there are ways to work the schemes to our benefit. The ACCC are likely to consider the masses, not the educated consumer.
Yup. That’s exactly what I allude to!

So all the people who squawk to the ACCC now, don’t come and moan on here when they force undertakings on loyalty programs that have very nasty (perhaps unintended) side effects... :)


Established Member
May 31, 2012
I’m reading the Exec Summary, the key takeaways FOR ME

Loyalty programs have over-reached.
Sure give your customers discounts, and advise them of reduced prices or bonus points on your products, or provide a wide range of rewards goods and services on which to “spend the reward points”

the idea you share this data wider, and then offer someone else’s products for a “normal” price less a credit voucher instead of as a reward goes too far. This is mercenary “share of wallet”. IMHO

Loyalty is A ONE WAY STREET to the company that hosts BUT NOT FROM THEM TO YOU
For Example
@ $10 for a $2,000 spend it seems quite the one way street.
@ 10 SC for a $170 spend or worse that’s $23,800 for 1,400 to make Platinum - there’s some pretty opaque measures in play none that much reward the loyal customer (I do like the veLocity family pooling
Couple of examples here of fares v SC.... DESPITE differential fare price based on flight distance SCs are offered a a flat zonal rate (which doesn’t favour the loyal customer)
690D298C-209E-49D3-86E2-7A7525BAE085.png E26E0ADD-0911-4748-8E86-0B634CA4062F.png

This is mirrored in the really small number of prestige reward availability (eg F or J points tics) let alone in PEAK PERIODS meaning a lot of customers expire points becasue there’s just no efficient way to reward yourself when you ARE TRYING to spend the points.
And the arbitrary manner of upping the ante
384,000 points for a F is seriously “out of reach” without the boost of fast-tracking by other peoples money (including funnelling business expenses via a C/C) or C/C sign-on bonuses or points boosts offers. The average earner on $80,000 paying home loans and payday PAYG taxes or super has a pretty limited chance of building a serious points balance,

Enforcing Competition of the Loyalty Schemes
The ordinary Customer Rewards offers are simply uncompetitive
It would be an interesting move for ACCC to force PUBLICATION of minimum % of spend levels that are deemed appropriate to earn points rewards for loyalty.

Incentivising Loyalty
If 0.5% of direct spend of $2,000 Is considered an appropriate reward for spending loyalty then I’d be disappointed.
And the more you spend, instead of ending up in earned points purgatory, the more rewards you ought be able to actually receive.

Incentivising Churn
PS sign-on bonuses miss the point of loyalty. They don’t inspire loyalty whatsoever. Not based on feedback on this board..... but they are a good money-spinner for the airlines and the “fly by night” churns but they don’t serve well the ordinary customer who ends up unable to be rewarded for their loyalty.


Established Member
Apr 2, 2006
Anyone planning to make a submission?

I am.
What will you submit?


Being the over-analysing geek that I am - the general vibe I pick up from reading the full 107 pages is that the ACCC has already made up their mind on many of their proposed recommendations. The recommendations will have an adverse effect on airline loyalty programs, and that will flow on to consumers.

I posted a few of my initial take-aways on Linkedin: "The Australian Government ACCC Draft Report on Customer Loyalty Schemes released today."


Jul 27, 2015
Hmmm... the draft recommendations really aren't that strong. Mostly better comms and disclosure from loyalty programs. I don't see this resulting in huge change in the sector.


Established Member
Jul 18, 2017
Hmmm... the draft recommendations really aren't that strong. Mostly better comms and disclosure from loyalty programs. I don't see this resulting in huge change in the sector.
Agreed, they're pretty 'bland' recommendations really.


Established Member
Oct 26, 2010
My Map
WIll be interesting to see where the ACCC focuses its attention, there seems to be a lot of discussion about privacy and data mining/sharing/selling that I'm not sure if its the focus of the ACCC, or maybe just how the media is interpreting and magnifying these concerns. I.e. stories about privacy and data matching seem get a lot more interest and make better headlines than a dry investigation into boring T&Cs. I think this might be a bit of a red herring as most consumers would know and expect how interested companies are in how consumers spend their money, that wouldn't be a surprise to anyone anymore.

The ACCC also criticised the poor wording of some benefit programs that failed to explain how schemes worked or notify customers of any reductions to benefits

This statement is a bit more interesting to me, the poor wording and maze of one-sided T&Cs has been noted by many here, the programs have rules and T&Cs that are so complex that its difficult to interpret what the benefits and the rules actually are, especially when a lot of the earning T&Cs are hidden from the consumer in tables buried somewhere else on the program website, or hidden in Fare Classes that aren't visible at the point of purchase.Often the rules around these programs are so complex that the airlines staff can't even fairly interpret them, let alone the consumer. Looks like the practice of the little *# at the bottom of marketing emails hiding some big devaluations may be looked at closely, especially the ones rolled out post-facto after a pax discovers their flight now dosen't earn status credits, or they are denied lounge access somewhere that they expected to for instance.

The comments around "Opacity" making it difficult for the consumer to make an informed choice might be a window for mandated things such as a typical earn/burn example or a forced publication of a table something like this (and this is just a facetious example):

To redeem a reward economy class return flight from SYD-LAX would require the following:
Flying 245 paid return economy class flights between SYD and MEL based on typical fares of $400 return = $98,000
Flying 14 paid return business class flights from say SYD-SIN based on typical fares of $3500 = $49,000 total
Spending $156,000 on groceries over a period of 10 years from Xxxx Supermarket
Spend of $15,000 annually on the Yyyy credit card for a period of 12 years
Churning 10 Zzzzz credit cards with 50K sign-on bonuses with the total minimum spend of $32,000 total

They could also construct a similar table about the "cost" of achieving Gold and Platinum status with a particular airline loyalty program.

Obviously each airline loyalty program is incredibly complex, with all sorts of warehousing and conversion options and the interactions with loyalty bands and airline fare and cabin classes, plus partner airlines and alliances with other loyalty schemes (all the bread and butter of AFF threads). I don't think it would be possible or even feasible/ desirable for the ACCC or the government to come in with a heavy handed "one size fits all" simplistic solution, where they somehow tell all Australian loyalty programs to "make it simpler". So making it more transparent to compare programs may be the next best option that they look to.

Can we now say - definatively - now that its been a few years since the ACCC changes have actually resulted in a detrimental impact on credit card point earning opportunities ? Or not? Or have consumers been able to adapt their behavior to extract value out of airline loyalty schemes depite the banks reducing/enhancing the earn rates on a lot of their credit cards. Maybe different answers to this question depending if you are talking about a highly engaged AFF Point collecting tragic that we are here compared to say the "typical" person on the street earning an income and taking a normal number of flights.

Last questions maybe a bit too broad/off topic for this thread itself, but worth pondering over.:)


Established Member
Aug 3, 2014
Be very careful what you wish for...
Remember what happened with credit card interchange fees...
Totally agree, if ACCC enforces changes, the points hoarders will be the losers for sure.
They should leave it alone, a loyalty program does no harm, and doesnt cost anything.

If they are really concerned about consumers just let Choice or whover make a report highlighting the advantages and disadvantages and let people decide.
(oh, doesnt google do this)


Established Member
May 31, 2012
Swings and roundabouts...

or perhaps flying pencils when future rewards seem so unrealisitic or so far off in the distance people make a value judgment that it is not worth chasing
I did like the term hyperbolic discounting, obscure I know so it suites this way of lookin at it Keyhole Economics – How is a gym like a drug dealer

For every good points earner closed off, there’s another one found.
BUT search costs time & effort
But of course many do not and this is because such searching in imperfect markets incur search costs. This is not just the money or the physical exertion required to trek the 150m ..... but also includes the opportunity costs borne during the search.

PS I think this blogger found the going too hard and didn’t write more articles. They say it’s a 2 year jounrey to build an audience for a travel blogger .... so they suffered a case of hyperbolic discounting (the future reward for them (size of audience, level of engagement), monetisation opportunity) seemed so far off in the distance it was valued as not worth chasing)
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