While the move will certainly be seen by Air Miles collectors as an overall positive course correction, the company will now contend with collectors disgruntled for a different reason: thinking their miles were set to expire, many collectors saving up for flights and other big-ticket rewards instead redeemed miles for lower-cost redemptions before the expiry date. Typical was this tweet posted by a disgruntled collector:
"We're hoping that by dealing with the expiry issue, foundationally, we are eliminating something that has been a concern to some of our customers - I wouldn't say all of our customers... And we're hoping that it will lead to more productive conversations between government and industry."
As if their bruised public image isn't bad enough, the company will also take a substantial financial hit: at least a $200 million reduction in 2016 revenues. The ongoing hit to revenues from keeping all of those points on the books in perpetuity may force LoyaltyOne to, as it said in a financial disclosure released on December 1, devalue the program's earning structure. Money quote #2:
So either #AirMiles heard an angry crowd...or, this was their plan all along to get people to cash in on radios instead of flights?— Peter Greathead (@Peter_Greathead) December 1, 2016
While speaking before the Ontario legislative committee, Aimia President Vince Timpano told a similar story of lost profits when the company's Aeroplan program was forced to reverse its own date stamping decision in 2013: "This decision cost us money; both a sizable one-time hit, and an ongoing impact on our profitability," Timpano told the committee.
"Going forward, LoyaltyOne will adjust the value proposition to collectors to offset the lost economics ... and to maintain, as closely as possible, the economics of the AIR MILES reward program prior to cancellation of the expiry policy."
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