Air Miles backs down, alters rewards program under pressure from collectors

After hearing complaints from customers this summer, Air Miles tells CBC News it has changed the rules of its loyalty program.

It explains that it previously gave members access to different rewards based on their individual personal preferences.

But Air Miles says members' access to rewards is now solely based on their status level or tier within the program: blue, gold or onyx.

According to the new rules, gold status — achieved by collecting at least 1,000 miles in a year — gives members access to a bigger selection of flights and merchandise. Elite onyx members — those who earn at least 6,000 miles in a year — get an even wider selection of those rewards.

The shift brings Air Miles more in line with some other rewards programs that offer extra perks to users who pile up more points.

It made the change because the original formula of tailoring rewards to personal tastes "was confusing to collectors," spokeswoman Natasha Lasiuk said in an email to CBC News.

Air Miles has been under fire in the past for how it doled out — or said it doled out — member access to merchandise. Rewards expert Patrick Sojka says its new approach appears more transparent.

But, based on recent developments with the rewards program, he questions if Air Miles is being upfront even now.

"I need to have proof in the pudding that that's not just what they're saying, that that is actually happening," said Sojka, with the Calgary-based information site Rewards Canada.

Playing a 'shady game'?

The shift to tiers comes around the same time a proposed class-action lawsuit was launched against Air Miles' owner, Toronto-based LoyaltyOne. The suit alleges the rewards program made it "increasingly difficult" for members to redeem miles that start expiring on Jan. 1.

Prior to the legal action, CBC News ran stories over the summer in which Air Miles collectors complained that when they logged in to the Air Miles website with a membership with few miles, they got access to premium rewards they couldn't afford.

But when they logged in with a different account — with enough miles to acquire those premium products — the same items vanished.

"It seems like a shady game they are playing," collector Tara Wells, of Sackville, N.B., told CBC News in July.

She said she saw great rewards including a vacuum, a food processor, a digital camera and a 3-D printer when logging in using her husband's blue account. He didn't have enough miles to buy the items.

But when Wells logged in using her father's gold account, which had enough miles to buy the items, they were nowhere to be found.

The loyalty program tells CBC News that "from time to time," up until the new change, it based what rewards people could access according to their personal preferences and shopping habits "to give collectors a tailored experience."

That explanation doesn't make sense to Wells. "There was no rhyme or reason to what I was seeing in my husband's account and my father's account. They were just random things. Like, neither of them have babies, but there was baby stuff."

New recruits saw inaccessible rewards

Air Miles now also offers another explanation why people with few miles had access to rewards they couldn't afford. Spokeswoman Lasiuk explained that over the past 12 months, new collectors saw premium merchandise to encourage them "to be more engaged in the program, to essentially show them what they could get if they got more miles."

Wells says her husband has been an Air Miles member for 16 years, so this explanation doesn't make sense either.

"That's just words, empty words," Wells said. "I mean, there was no reason for us to see this digital 3-D printer for 15,000 points that we couldn't have gotten and then my father couldn't see it and he could have gotten it."

Sojka suggests the reason various members were blocked from accessing some rewards was because the program was creating roadblocks to redeeming soon-to-expire miles.

"They're probably trying to cover their butt to make sure that they do write off however many dollars worth of miles at the end of this year," he said.

At the close of 2011, Air Miles introduced a five-year expiry date on reward miles. That means on Jan.1, 2017, any unused miles collected before 2012 will expire and become worthless.

Retailers pay Air Miles to supply them with miles they can offer customers as an incentive to shop at their stores. In return, the loyalty program must supply collectors with rewards. So unredeemed miles generate the biggest profit.

However, Lasiuk told CBC News that the program provides a bigger rewards selection than ever before and that members are finding numerous ways to redeem their miles.

Collector Wells says she believes Air Miles could still do a better job of providing members with reward choices. She believes all collectors should have access to all the program's items, regardless of personal preferences, one's tier or anything else.

"Everybody should see everything," she said. "Then you could choose what you could afford and what you want."