New Act causes a stir for loyalty programmes

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The Consumer Protection Act is expected to change the way a number of suppliers operate. One of the main concerns is how it will affect loyalty programmes. Chana Viljoen takes a closer look.

Once fully implemented, the Consumer Protection Act (CPA) is said to make South African consumers among the most protected in the world. But, for suppliers it means making a number of changes to the way they operate. The general effective date of the CPA is 24 October.

Ina Meiring, Director of Werksmans Advisory Services, says that if processes and terms and conditions are not compliant, it will be expensive to revisit and redraft, but she adds: “I do not think that it should be regarded as a hassle but, rather, as part of being a good corporate citizen by complying with duties to protect vulnerable consumers”. The CPA dictates that documents setting out loyalty programmes should clearly explain to the consumer the nature of the programme, the goods or services to which the programme relates, the steps required to be taken by the consumer, and where and how access may be gained to the programme.

According to Meiring, one of the major changes the Act will require relates to availability. She says: “duties are placed on both sponsors and suppliers to ensure sufficient availability of goods and services and they are also required to give notice if there is a restriction or limited availability”. Companies will no longer be able to say that goods and services are ‘subject to availability’, they will instead have to give consumers advance warning, in writing, that a product or service will not be available for a certain period. That period may not be longer than 90 days. The Act also states that neither the sponsor nor the supplier must impose any monetary charges in respect of administration, processing or handling of a transaction, if the consumer is required to pay a periodic free to remain a member of the programme.

“Although section 35 of the CPA specifically regulates all customer loyalty programmes, it should be noted that the whole array of protections provided by the CPA in general are available to consumers because the CPS also applies to a transaction in terms of which a loyalty credit or award is exchanged for goods or services,” says Meiring. She explains that the Act protects fundamental consumer rights, which include a right to equality, a right to information in plain and understandable language, a right to fair, just and reasonable terms and conditions, a right to fair value, good quality and safety and a right to return goods under certain circumstances.

To monitor compliance, a National Consumer Commission will be established and the Tribunal under the National Credit Act may also issue orders. Meiring says any court may also be approached. Penalties for an offence include fines and imprisonment not exceeding 10 years.

What’s new with loyalty programmes?

Accor introduces electronic voucher

Accor Hospitality’s A|Club recently introduced a new electronic voucher system that will allow any member of the programme to instantly pull a record of their stay simply by logging into their account on a-club.com.

The new system makes points conversion only a few clicks away. Members also have the option to volunteer to have all or part of their points converted into donations in aid of the Pasteur Institute, which is a French non-profit private foundation dedicated to the study of biology, micro-organisms, diseases and vaccines.

Premier Hotels launches Royalty Card

Premier Hotels & Resorts is fast becoming a force in the South African leisure, business travel and conventions industry following the development of a number of new properties in the country. The hotel group’s Royalty Card now offers an enhanced service to loyal customers. The card offers VIP check-in and corporate rate discounts along with numerous other added value benefit. 

Cathay Pacific offers global delivery      

Asia Miles members living outside of Hong Kong are now able to redeem certain items following the launch of a worldwide delivery service. In the past, the more than 600 awards available required members to do a personal pick up, and most of the pick-up points were in Hong Kong. Now the global reward programme is meeting the needs of those located in other parts of the world.

Extra benefits for Delta SkyMiles members

Delta recently unveiled its new SkyMiles Medallion Programme, which now features four elite levels. The newest of these, Diamond status is reached after flying 125 000 Medallion Qualifying Miles or 140 segments. Benefits include Delta Sky Club membership, a 125% mileage bonus, more fee waivers, and other exclusive rewards. A further development is that whatever any MQM’s passenger earns above their qualification level at the end of the year will rollover to their MQM balance for the following year. Delta SkyMiles merged with Northwest’s WorldPerks programme towards the end of last year to form the world’s largest frequent flyer programme.

Lufthansa introduces Miles & More cash card

Lufthansa has introduced a new offering as part of its Miles & More loyalty programme that gives South Africans a wider variety when earning and redeeming miles. The airline partnered with a global leader in prepaid incentive and reward services, Accor Services, to launch the Miles & More multi-store cash card. The card can be ordered via the airline’s website and comes in four denominations: a R200 card costs 9 000 miles, R400 costs 17 000 miles, R800 costs 31 000 and R1 000 costs 40 000 miles. The prepaid card entitles the cardholder to shop at a range of over 3 000 selected retailers countrywide including Woolworths, Boardmans, The Pro Shop, Cape Union Mart, Red Square, Mangwanani, Prato, Vodacom Golf Village, Arthur Kaplan, Blacksnow, Spilhaus, Temptations, Edgars, Cellini, Hi-Fi Corporation, Camelot Spa, Waltons and American Swiss.

The card was introduced to address the lack of local possibilities for South African based members, which previously was limited to flights, car hire and hotel accommodation. “We were looking for an attractive offer for our local customers that would either match or provide an alternative to our competitors’ offer,” said Gabriel Leupold, managing director Southern and Eastern Africa for Lufthansa German Airlines and Swiss International Air Lines.

Etihad launches iPhone application

Etihad Airways has launched a new Apple iPhone application for members of its loyalty programme, Etihad Guest. The application offers users real-time loyalty point redemption. The application is available free to download and use from the Apple iPhone store and has been introduced to assist Etihad Guest members with an innovative and user-friendly tool designed to assist them manage their accounts and stay informed about the latest Etihad Guest promotions. The iPhone application allows members to redeem their points immediately for any of the more than 1 700 products from the Etihad Reward Shop, benefit from the channel-exclusive promotions, check the latest partner promotions, view their account information, browse a list of all programme partners and read general programme information. 

Making the best of SAA Voyager Miles

SAA Voyager members shouldn’t forget that they can use their Miles for upgrades as well as flights on South African Airways. Upgrades will also be available on other Star Alliance flights in the not too distant future. During the World Cup this year, it is expected that fewer seats will be available for redemption so Voyager is offering members the option of extending the expiry date by a further six months. To do this members need to apply before the end of March, and will be charged a few Miles as an admin fee. Members can visit flysaa.com and follow the normal login process. They will then get the Miles extension option on non-air awards under the ‘My Voyager’ tab.

New partnerships for Miles & More

Lufthansa’s loyalty programme, Miles & More is expanding its partnership with Avis, allowing members to rent a car from Avis worldwide with their award miles. The programme has also done away with the time limit. Previously car rentals were restricted to selected countries and only when a car was hired for a weekend or a week. The booking process has also been simplified, as members redeeming miles to rent a car at Avis only need to enter their customer pin on the miles-and-more.avis.de website.

Once a customer confirms a booking the mileage shown is automatically deducted from their mile-credit account. Until the end of the year, Avis is offering customers more bonus miles each time they rent, which allows them to earn up to 3 000 award miles per rental. Since the beginning of March, Miles & More members have also been able to earn and redeem mile credits at popular design outlets including Wertheim Village, Ingolstadt Village and Maasmechelen Village (Belgium).

Camelot Spa launches loyalty card

The Camelot spa group, which has award-winning spas throughout Southern Africa in some of the country’s top hotels and destinations, has introduced a loyalty card. How it works is that for every treatment booked at R350 or more, members earn a stamp on the card. They will then receive a free treatment on the seventh stamp collected. Some of the hotels featuring a Camelot Spa include Le Franschhoek Hotel & Spa, Mandela Rhodes Place, Spier, Plettenberg Park, Zimbali, OR Tambo InterContinental and more.

Everybody wins with Winner Circle

In addition to the bonus points, accommodation discounts, free draw tickets based on carded slots and table play, Peermont’s Winners Circle has negotiated a range of special deals and discounts for its members. Some of the new partners include SAA, John Graig, Boston City Campus, College SA, Jack’s Paint, Early Bird and Mastercare, Drain Surgeon, Marvellous Maids, Run Walk for Life, Sureslim, Fantastic Racing, Weber, Netstar, Europcar and EZ Shuttle. Every Peermont Casino resort also offers a range of local benefits ranging from a free car wash for Gold cardholders to birthday invitations, movies, breakfasts and buffets.

Flight Centre’s new corporate brand rewards loyalty

Corporate Traveller, recently launched by Flight Centre, has introduced a unique loyalty programme for the corporate travel sector. The principle of the programme is that the more a company spends with Corporate Traveller, the more CT Loyalty points they will earn. The point balance is tracked automatically and can be viewed online using a unique login. Points can be redeemed against various rewards ranging from a selection of travel escapes to VISA Electron cash cards. Leisure Cards are also available for leisure trips.

ExecuJet’s membership card takes off

ExecuJet recently introduced a jet card, and is pleased with the success of the new SimplyFly Membership Card since its launch in late 2009. The program, which is designed to create a more time effective and convenient approach to chartering an aircraft, is popular with companies or individuals who make regular use of private flights and want to secure a pricing and service structure. “The main advantage enjoyed by our South African clients is the fixed pricing of future charter flights coupled with the availability of a wide variety of aircraft” states Chris Frost, Charter Manager South Africa. “In our region the foreign currency and fuel price fluctuations creates an unstable commercial environment for ad-hoc charter so accountants appreciate the fixed pricing.”

The membership card enables clients to select an hourly utilisation package of 25, 50, 100 or 200 hours and a preferred aircraft type from the ExecuJet charter fleet. It is a tailored program to suit all budgets and needs. For the 2010 FIFA Worldcup, ExecuJet South Africa introduced a special entry level SimplyFly Membership. Cards will be available in denominations of 15 hours and include a money back guarantee for unutilised hours at the end of the tournament.

Did you know?

Members of Singapore Airlines’ loyalty programme, KrisFlyer can save up to 15% on the mileage required by redeeming online through the website, krisflyer.com.