New Bill Bans the Expiration of Reward Points in Ontario

Posted December 21, 2016 by CCC Staff in

Handful of credit cards

Are you sick of your reward points expiring? Pretty soon that practice will be illegal in Ontario – and we have Air Miles to thank.

Air Miles has been making news headlines a lot lately – for all the wrong reasons. The popular travel rewards program came under fire for its controversial expiry policy that would see travel reward points older than five years start to expire in the new year if left unredeemed. Facing mounting pressure from cardholders, the government and the media, Air Miles recently did an about-face, nixing the expiration of its reward points.

Why did Air Miles suddenly change its mind when it had been gung-ho on going ahead with wiping out the points of its cardholders for months? A new government bill that comes into effect in Ontario in 2017 has a lot to do with it. Under the new Protecting Rewards Points Act, it will be illegal for credit card reward points to expire for any cardholder that remains active. The bill hasn’t come into effect yet, but once it does, it will apply retroactively to October 1, 2016. Any cardholders in Ontario that has lost points, will have the points returned to them.

The bill is championed by Arthur Potts, an Ontario Liberal MPP. He decided to introduce the bill after hearing from scores of constituents upset over Air Miles’ handling of its reward program. Potts calls this an “incredible victory for consumers.”

Inactivity and Devaluing Reward Points

A major pet peeve for cardholders is programs like Air Miles that devalue reward points. When points are devalued, it takes more points to redeem rewards. (There have already been rumblings that Air Miles is set to devalue its travel reward points to make up for the loss of its expiry policy.)

Arthur Potts, Ontario Liberal MPP

Potts says that the new bill may include regulations for inactivity and devaluing points. Many reward programs wipe out your points if you’re inactive for a period of time. For example, your Air Miles are gone, poof, if you don’t collect or redeem any points in two years. Although the new bill won’t ban rewards from expiring under that scenario, it may specify how long a cardholder has to be inactive before clearing out points.

In terms of devaluing points, the government is currently meeting with industry and consumer groups to decide how to best address this in its current bill.

New Bill Not Just to Benefit Credit Cardholders

The new bill banning the expiry of credit card reward points won’t just benefit credit cardholders. It will extend to other loyalty reward programs as well, such as Starbucks and WestJet. Those programs will be required to put an end to their expiry policies. Starbucks has already said it will comply with the Ontario legislation, but hasn’t made a decision about whether it will cancel its policy outside Ontario.

Potts has his sights set next on mall gift cards. Many consumers are under the false impression mall gift cards can’t expire, when that simply isn’t true. Under Ontario’s current legislation, a dormancy fee of $2.50 can be charged on mall gifts cards, starting 15 months after the card is purchased. (This is different from retailer gift cards from Gap and La Senza, which don’t have expiry dates.) This could soon change.

The Bottom Line

The new bill is a major victory for consumers. If history is any indication, look for other provinces to adopt similar legislation. (This happened when Ontario first introduced a bill banning expiry dates on gift cards in 2007.) Some travel reward programs like Air Miles are doing away with expiry policies across Canada, but until legislation comes into effect in your province, it’s important to make sure you follow the rules of loyalty reward programs to avoid losing your hard-earned points.