The credit card company partnered with Costco says customers can safely ignore the expiry date on the retailer’s Cash Back Rebate Coupons. A spokesperson for Capital One, which administers the Costco card, told MoneySense the coupons will be honoured post-expiration across Canada.
Costco mails out its cash-back rewards in the form of a coupon, instead of applying the cash reward directly to credit card holders as most other programs do. Capital One’s comments come two months after Ontario passed legislation banning the expiry of loyalty points. Some consumers are receiving coupons in the mail in recent days that still carry an expiry.
While the Ontario legislation was inspired by Air Miles’ plan to cancel points that were left unclaimed for five years, the Ontario MPP who championed the private member’s bill says it also encompasses the Costco reward program. “We are making all loyalty programs as if they are gift cards, and gift cards are not allowed to expire on the basis of time alone,” explains Arthur Potts (Beaches-East York).
The legislative change to protect consumers from loyalty programs is retroactive to October, meaning any loyalty rewards collected by members had at that time and any points collected since are now protected in Ontario, subject to some conditions. The goal of the bill is to acknowledge that consumers are signing up for these loyalty programs to with the understanding that as part of the agreement they will receive a set number of points based on their spending. The primary change outlined in the bill is that those points are no longer allowed to expire “simply on the basis of time.” That last point is important, says Potts, who adds that when the final regulations governing loyalty programs are released in the spring, there will be some exceptions where points can be cancelled.
While those regulations are still being debated in committee, it could allow loyalty programs to impose certain conditions, such as that the cardholder must make at least one transaction a year, either accumulating or redeeming points in order to keep your reward in good standing. “We think that’s reasonable,” he says. “It’s a two-way street, you have to be engaged in the program. You just can’t sit on something forever.”
Shortly before Ontario passed its legislation, Air Miles abandoned its plan to date stamp points, although that hasn’t stopped the company from making other changes that weaken the program from a consumer perspective. Air Miles has reportedly lowered the value of miles in its vacation or cruise packages in the Dream category by around 20%.
Potts says this was a concern when they were drafting the legislation. While he says the bill gives the province the power to address these types of moves, he’s not sure quite what that would look like given that the price of products or services being redeemed change over time.
Watch: Are Air Miles worth it?