Improvements to customer loyalty schemes and broader legislative reforms are required to protect consumers using loyalty schemes, according to the ACCC’s final report into customer loyalty schemes released today.

The report recommends loyalty schemes, such as frequent flyer, supermarket and hotel operators, better inform consumers, improve their data practices and stop automatically linking members’ payment cards to their loyalty scheme profiles. It also calls for broader changes to consumer and privacy law.

“We are calling on companies that offer loyalty schemes to improve both their data practices and how they communicate with consumers, to help consumers understand how these programs operate,” ACCC Chair Rod Sims said.

“Even simple changes, such as more prominently alerting customers that their points are about to expire, for example, in the subject line of an email, could help prevent a consumer from losing points earned over several years.”

The ACCC is also concerned that the profiling of consumers based on the data collected by some schemes, including through the sharing of consumer insights with third parties, could result in consumers receiving increasingly targeted advertising. This could also potentially result in different consumers being offered different prices for an identical product or service.

“Many consumers are increasingly concerned about receiving targeted advertising, in some cases from companies that they have never dealt with before,” Mr Sims said.

“There is also an emerging risk of real consumer harm if individual consumers were to be charged inflated prices based on profiling derived from their data. For example, if a person’s frequent flyer data or online search history indicates they can only travel on certain dates, or otherwise based on their income, geographic location or other information collected through the loyalty scheme they may be charged extra.”

Another major concern with loyalty schemes are privacy policies that are very vague and seek broad consents and discretions from consumers about how they’re going to collect, use and disclose their data.

“Many consumers would be shocked to find that some supermarket schemes continue to collect their customers’ data at the checkout even when they do not present their loyalty cards. They do this by tracking customers’ credit or debit cards from previous transactions,” Mr Sims said.

“When a customer chooses not to present their loyalty card, we think it is reasonable that they would not expect their data to be collected for that transaction, and we are therefore calling on the relevant schemes to stop this practice.”

While some loyalty scheme operators made changes after the ACCC commenced its review and released its draft report, the ACCC remains concerned about certain practices that a number of loyalty schemes continue to engage in.

The ACCC’s report reinforces recommendations from its Digital Platforms Inquiry Final Report regarding privacy and consumer law.

”We also recommend that unfair contract terms be prohibited, rather than simply being voidable, and that a new law against certain unfair trading practices be considered,” Mr Sims said.

Our recommendations would protect consumers and help ensure consumer trust in loyalty schemes, in the digital economy and in data-based innovation, which is a benefit for the broader economy.”

Tips for consumers about loyalty schemes are at Customer loyalty schemes.

The ACCC encourages consumers to report concerns regarding the practices of their loyalty schemes.


The ACCC commenced its review of customer loyalty schemes in early 2019 after competition and consumer issues arising from customer loyalty schemes were announced as a 2019 priority.

The ACCC and the various state and territory Australian Consumer Law (ACL) regulators received about 2000 reports about loyalty schemes in the five years to December 2018.

The ACCC’s final report was based on analysis of information voluntarily provided by loyalty program providers and consumers, research, and consultation and written submissions in response to the draft report released on 5 September 2019.

More information about the project is available at Customer loyalty schemes review.