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Your rights are protected when you use a loyalty programme, but it is up to you, the consumer, to ensure that companies do not abuse these rights.
The Consumer Protection Act (CPA) regulates how loyalty programmes must be run to ensure that your rights are not infringed. Section 1 of the CPA defines a loyalty programme as a scheme offering consumers credits or awards for a transaction, while section 35 makes it clear that loyalty credits or awards are as good as money when you offer it as payment for goods or services.
Section 35 also prohibits anybody from offering participation in a loyalty programme, credits or awards if there is no intention to fulfil the offer or provide it in another way. The offer must be part of a loyalty scheme and clearly state the nature of the programme, credit or award, as well as the goods or services involved.
In addition, the offer must clearly state what the consumer must do to participate or receive benefits, as well as the details of who the consumer can contact to get access to the programme or loyalty credit or awards, as well as the date, time and place.
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The CPA also requires the company offering the loyalty programme and any participating supplier to ensure that the goods or services are available to fulfil the reasonably anticipated demand and not limit the capacity to supply the goods or services on any basis.
Companies and suppliers must accept sufficient credits or awards as adequate payment and are not allowed to require that consumers accept goods or services of inferior quality to those available for other kinds of payments.
They are also not allowed to charge consumers for administration, processing and handling of the transaction if the consumer pays to be a member of the programme and cannot demand that the consumer buy any other goods or services connected to the transaction.
However, the company or supplier is allowed to impose a restriction on the availability of these goods and services if it notifies members at least 20 business days before the beginning of the period of limited availability, but they cannot do this for more than 90 days in a year to prevent companies and suppliers from offering loyalty benefits that are never available.
When a company or supplier is unable to supply the goods or services and can arrange for another supplier to supply it within a reasonable time in a reasonable quantity, there is no contravention of section 35, whether the consumer accepts it or not.
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