On Aug. 1, 2019, the Government of Quebec will amend the Regulation Respecting the Application of the Consumer Protection Act to introduce new rules governing loyalty programs and rewards points (the "Regulations", final draft version available here). Since the new loyalty program regime will be more comprehensive and restrictive than the rules that were introduced under Ontario's Protecting Rewards Points Act and corresponding regulations (which new rules came into force on Jan. 1, 2018, as noted in our article "Changes to Loyalty Programs and Rewards Points in Ontario and Quebec" ), retailers who offer loyalty programs to Quebec consumers should review their existing practices to ensure that they align with the new requirements in Quebec.

The key provisions of the Regulations can be summarized as follows:

  • Expiry of Points: While points are prohibited from expiring on a set date or by the simple lapse of time, they can expire for reasons of inactivity. Loyalty program merchants may only expire a participant's loyalty points if the following conditions are met: (i) the participant has not received or exchanged any points for at least one (1) year; and (ii) the merchant sends the consumer a notice of inactivity at least thirty (30) days (but no more than sixty (60) days) before the points' expiry date– which notice must exclusively speak to the fact that inactivity will result in the expiry of the consumer's points and set out the date of expiry. In addition, the loyalty program agreement will need to track the disclosure requirements set out in the Regulations.
  • New Pre-Disclosure Requirements for Loyalty Program Agreements: Merchants offering loyalty programs will also be required to provide consumers with pre-disclosure information prescribed by Regulations, which include the terms and conditions applicable to earning and exchanging exchange units, the terms surrounding the expiry of exchange units, as well as the conversion factor used by the program sponsor to exchange the participant's exchange units into into another form of exchange units.
  • Unilateral Amendments: Before unilaterally amending a loyalty program agreement, the loyalty program merchant is required to send a notice to the consumer between ninety (90) and sixty (60) days before the amendment comes into force. That being said, unilateral amendments intended to devalue or change to the detriment of the consumer the number of points the consumer has accumulated or that purport to change the conversion factor of points to another form of points are prohibited.
  • Points: Loyalty program merchants are also prohibited from increasing the number of points required to obtain a good or a service in a disproportionate manner when compared to any retail value increase of that good or service.

Please note that there are certain limited exceptions – for instance, loyalty programs for a single good or service, or a set of goods or services, determined at the time of entering into the loyalty program agreement are exempt. Similar to the Ontario law, there is also a diminimus rule whereby loyalty program rules do not apply if the retail value of each good or service that the consumer may obtain does not exceed $50.

With that being said, particular care needs to be exercised to ensure new, or existing, loyalty programs are structured and administered in full compliance with the law in Quebec and in other jurisdictions where rewards points are offered.