A few weeks before Air Miles controversial New Year’s Day expiry of unused miles banked more than five years ago Canada’s largest loyalty program abruptly reversed course in announcing that expiry policy was being cancelled and its miles would never expire.
The seismic shift in Canada’s largest loyalty plan policy was prompted by Ontario legislation that was to become law this month making it illegal for loyalty programs to let customer points expire without their permission. For those Air Miles collectors who hadn’t done anything about their expiring miles the last-minute reprieve comes as welcome news however the multitude who for months have rushed to redeem their unspent hoard on travel or merchandise they didn’t want the reversal comes as a bitter pill to swallow.
The long-term damage to the Air Miles brand from the expiry policy debacle remains to be seen but at the very least has forced millions of passive collectors to pay more attention to the worth of their miles and that can’t be a bad thing. For those collectors who sat tight and didn’t join the stampede to redeem their miles there are some lessons to be learned about the risks of not using banked loyalty program miles and how to get the best value from them when they are redeemed.
For starters, simply put points & miles lose value over time so the longer a collector sits on their account the less value it holds as loyalty programs periodically adjust their award levels. For example in 2013 an Air Miles short haul, low season flight reward roundtrip between Edmonton and Calgary required 950 miles while today that same flight award requires 1,200 miles, a 25% decrease in the value of each point in three short years.
Given that Air Miles stood to gain millions when old miles expired and ceased to be a liability on its balance sheets expect redemptions levels to raised to recoup some of that lost money so it would be wise for account holders still sitting on a big balance to seriously consider a redeeming a Dream Reward in the shorter-term or see their hard earned miles further devalued.
It should be noted that the Ontario legislation only outlawed the expiration of loyalty program miles and points due to the passage of time however miles can still be lost through inactivity which with Air Miles is 24 months. This means there must be at least one mile earned or a redemption made within that period of time and it’s a common clause for all loyalty programs.