In the highly competitive retail market, traders must devise strategies to boost sales and retain customers. Many traders have introduced joint or standalone reward points schemes in recent years to encourage repeat patronage, by letting consumers earn and accumulate points with their spending to redeem various benefits such as gifts, discounts, coupons or cash rewards. However, a poorly arranged or ill-thought-out scheme could give consumers a disappointing experience, leading to dissatisfaction, disputes, or even loss of customers, ultimately defeating its purpose. The Consumer Council has often received complaints concerning these reward schemes, ranging from the lack of transparency on the available stock of reward items which put the trader’s integrity in doubt; lack of flexibility in points earning and redemption methods which failed to fairly address the needs of vulnerable consumer groups, such as the elderly; to the subsequent change of terms of a given offer that led to the consumer’s disappointment. This situation is far from satisfactory.
The Council urges traders to improve the transparency of information and terms, clearly outlining the details of their reward points schemes while avoiding subsequent changes. Particularly for promotional activities, any necessary alterations to the terms should be communicated to consumers early on, and related disputes should be handled flexibly to maintain consumer confidence. Although digital transformation is the general trend for businesses, with citizens growing more accustomed to using various mobile apps for daily tasks, traders must be consumer-centric. They should employ fair sales practices to cater to the diverse needs of different consumer groups, particularly the elderly or those less proficient in new technologies, so as to foster a caring, inclusive and pleasant shopping experience.
Case 1: Reward Item Out of Stock for Redemption but up for Sale Online
The complainant participated in Trader A’s regular reward points promotion for members. 1 point is earned for every $500 spent, which can be used to redeem reward items upon reaching specified point levels. According to the promotional terms, the corresponding points would be credited to the member’s account within 7 days following a purchase, with 30 June as the last eligible transaction date for earning points. After spending on 19 June, the complainant did not receive the corresponding points until 14 days later, longer than the trader’s timeline as pledged. When seeking to redeem the reward, he found that his preferred item along with all other items of the same points tier were out of stock. However, he was unable to accumulate more points to redeem a higher tier reward, as the points earning period had ended. The complainant later saw on Trader A’s online store that his preferred reward item was up for sale, and doubted the previous claim that it had run out of stock. He expressed this dissatisfaction to Trader A repeatedly but received a consistent response from them that “reward items are limited in stock and available on a first-come, first-served basis”. He then filed a complaint with the Council.
After the Council’s conciliation, Trader A agreed to exercise discretion and arranged for the complainant to collect his chosen reward item at their store, and the case was thus resolved.
Case 2: Physical Reward Card Rejected for Earning Points
Trader Requested Consumer to Download Mobile App on the Spot
The complainant, a senior approaching 80 years old, was used to presenting a physical reward card when checking out at Trader B to earn or redeem points. On his most recent visit, he was informed by the cashier that physical cards were no longer accepted, and that he would need to use a mobile app in order to continue earning or redeeming points. As the complainant was unfamiliar with using a smartphone, and there was no staff to assist him, he struggled to download the mobile app by himself. After several unsuccessful attempts, he resorted to calling Trader B’s hotline for help, but his calls went unanswered. Discontented with Trader B’s refusal to accept physical reward cards, and finding such an arrangement causing great inconvenience to senior citizens with difficulty in using apps, the complainant sought help from the Council.
The case was resolved shortly after the Council’s conciliation. With the complainant’s consent, the Council relayed this unpleasant experience and made relevant suggestions to Trader B. In response, the trader stated that consumers may call their customer service hotline when having issues with the concerned app, and that staff assistance would be available at all participating stores of the reward scheme.
Case 3: Subsequent Change of Terms for Shopping Mall’s Offer
Electronic Vouchers Rejected by Desired Merchant
The complainant participated in Shopping Mall C’s event to redeem an electronic mall voucher with her membership points. Before making the redemption, she was aware that Shopping Mall C offered both physical and electronic vouchers, the only difference between the two being that the former was eligible for use at 2 additional merchants. Having confirmed from Shopping Mall C’s official website that electronic vouchers could be used at her desired store, the complainant chose the electronic version. Later, when trying to use the voucher, she was informed by the said store that they no longer accepted electronic vouchers. The complainant immediately rechecked Shopping Mall C’s website, only to find that the store was removed from the electronic voucher applicable merchants list she had browsed earlier. She proceeded to enquire with Shopping Mall C, and the staff explained that the concerned store now only accepted physical vouchers. The complainant requested to exchange her voucher for a physical one but was rejected by the mall. Dissatisfied with the sudden change of terms for upsetting her shopping plans, she lodged a complaint with the Council.
With the Council’s conciliation, Shopping Mall C agreed to exchange the complainant’s electronic voucher for a physical one. Although the case was settled, no explanation was given regarding the changes to the applicable merchants list of electronic vouchers.
The Council urges traders to improve information transparency, clarify the terms and conditions of reward points schemes and fulfil their commitments. Consumers, on the other hand, should assess their financial capacity and actual needs, and be cautious of being lured into impulse buying by reward points offers. For those planning to or already participating in one of these schemes, they should take heed of the following:
- Thoroughly review and enquire about the terms and conditions of points reward schemes, including the methods for earning and accumulating points (with a mobile app or physical card), the validity period, pre-registration requirements, and any specific spending conditions for earning points such as purchasing particular types of items, designated shopping malls or stores, or specific time frames;
- Retain all spending receipts. Contact the trader promptly for long-delayed uncredited points or inaccurate points records;
- Prior to redeeming rewards, pay attention to the points expiry date, redemption procedures and deadline, etc. As reward items are normally available while stocks last, it is advisable to redeem the chosen items as soon as possible. Furthermore, take note that some reward items may require an extra charge for redemption. Enquire with the trader before redeeming rewards to clarify any uncertainties. For instance, check if an electrical appliance has any warranty, the terms and validity period of cash coupons, or whether defective items could be exchanged. Keep a record of all redemptions made for future reference;
- Recently some consumers received fraudulent SMS messages regarding expiry of reward points from scammers impersonating legitimate traders. They were deceived into entering their personal and credit card information via the hyperlinks provided and thereby suffered financial loss. If consumers find a message suspicious, particularly one that may contain QR codes or hyperlinks directing to websites requesting one’s personal, credit card or bank payment information, verify with the trader first. Make use of the “Scameter” search engine developed by the Hong Kong Police Force to assess the risk of fraud and cyber security, so as to avoid falling victim to scams.
Download the article (Chinese only): https://ccchoice.org/568pointreward
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