Consumer Council asks brands with loyalty initiatives to ensure smooth experience, highlights 3 fault cases

Hong Kong's consumer council has recently handled three cases of disputes among customers and brands regarding loyalty programmes, membership points and redemption of rewards.

The first case involved an elderly who found the points of her membership card offered by a supermarket decrease from 1,521 points in early January to 1,323 points some 10 days later, while records in late March showed that she had 1,594 points, but had dropped to 1,550 in early April. Upon speaking to a member of staff, the consumer was told that these points had a validity period of two years and they would be automatically deducted after their expiry dates. The lady explained that she relied on the receipts after spending money and earning the points as she did not know how to check the points via a smartphone. After the Consumer Council’s conciliation, the company exercised discretion and transferred about 800 points to the old lady's membership account. It reiterated that these points had a validity period of two years. The Consumer Council relayed the results to the complainant and reminded her to pay heed to the expiry date and spend her points as soon as possible.

The next case was about a man who earned points from a business through shopping with his credit card and redeemed six supermarket HK$50 e-cash vouchers through the company's mobile app on 26 March this year. However, after using two vouchers, he found that the remaining four vouchers had disappeared from his app. He learnt that the disappeared vouchers had already expired on 9 April later and was unhappy about a two-week validity period was unreasonably short. The company eventually returned points equivalent to four e-cash vouchers to the complainant and the case was settled. However, it advised customers that the validity periods were usually displayed beneath the corresponding rewards but these periods vary from one reward to another, and consumers should read the details carefully before redemption.

The last case was about a woman who failed to use a discount voucher due to the company's system error, as she hoped to use a HK$20 coupon to buy homeware priced at HK$349. After failing to use the voucher due to a system error, she reported the issue to the on-site staff immediately, but they only stated that the offer was unavailable due to a system error. As many people were lining up at checkout, the consumer decided not to argue further. However she later emailed the company and had to wait for three months before hearing from the company. She also thought that the company should have honoured their promise to their members irrespective of whether the vouchers were offered for free or not, as she had already fulfilled the spending requirements. Eventually the company points credit a total of 4,000 points worth of HK$20 to the complainant’s membership account.

Based on these three cases, the Consumer Council advised that customers should check the account balance and validity periods of points through the website and mobile app regularly and redeem rewards punctually to avoid wasting unspent points. Consumers who are not familiar with the use of computers or smartphones should consider using in-store devices or calling enquiry hotlines to check their account balance too.

Moreover, before redeeming rewards, customers are advised to read the details carefully and take note of terms and conditions regarding the expiry date of the vouchers, whether they can be used in conjunction with other offers, and if more than one cash voucher can be used in a single transaction. Lastly, consumers should keep the registration information and record the related login details properly to avoid forgetting them.

The Consumer Council said businesses offering reward programmes have the responsibility to ensure the smooth running of their membership system and the related applications. They are also asked to improve their customer service and increase the efficiency of customer hotline services and installing in-store facilities, to help consumers check their account balance and address their point-related enquiries.

In addition to loyalty programmers, the Consumer Council has also unveiled tips for using services provided by virtual banks. For example, as virtual banks have stringent settings for identity verification and system stability, customers should have a decent understanding of smartphone operations and safety awareness. They should also safeguard their phone, ensure the operating and security systems of the phone and the relevant banking app are regularly updated.

Also, while the original intention of these reward schemes was to build customer loyalty, the loss of points or failure to redeem rewards due to various reasons adversely affected the mutual trust and relationship between traders and consumers, resulting in a loss that outweighed the benefits.

Another issue is that customers should consider whether their selected bank could provide services that meet their personal needs. Virtual banks currently offer basic banking services, such as savings deposits, time deposits, cash withdrawal, local transfers, but not all of them also provides debit cards, credit cards, foreign currency trading and loans. More importantly, no virtual banks offer cheques, mortgages and investment services now.

The Consumer Council has also highlighted other issues, such as eligibility of opening accounts, money withdrawal, deposit, money and telegraphic transfer limits, and a wide variety of promotional offers that attract customers to open a bank account.

It reminds consumers that Hong Kong’s virtual banks are utilising fintech to progressively expand various banking services, such as launching numberless debit cards to enhance security, time deposit maturity dates designated by customers. All of these will further increase market competition for banking services. Consumers interested in opening a virtual bank account should pay heed to the latest development and service scope of the various virtual banks, then carefully consider personal requirements for banking services before making a decision.

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