Customer loyalty schemes can do more harm than good if not run correctly, Hong Kong businesses warned

·2-min read

Hong Kong businesses have been warned that flawed membership reward schemes risk ruining their relationships with customers, after a lack of transparency in the terms and conditions of various programmes sparked complaints.

The Consumer Council said a lot of chain stores had launched membership rewards in recent years, but the number of complaints it received in connection with these programmes was on the rise.

It got 30 complaints last year, 11 per cent more than in 2019, and 66.7 per cent higher than the figure recorded in 2018.

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In one case, a man used 60,000 points to redeem six e-cash vouchers for shopping at supermarkets from a company on March 26. But after spending two, he found the rest had disappeared.

Gilly Wong, Consumer Council CEO, said poor membership rewards could damage relationships with customers. Photo: May Tse
Gilly Wong, Consumer Council CEO, said poor membership rewards could damage relationships with customers. Photo: May Tse

The complainant later learned from the company that the vouchers – a special promotional offer – had expired on April 9.

He thought a two-week validity period was unreasonably short, and told the council he would not have spent so many points to redeem the vouchers in one go if he had known about it.

Gilly Wong Fung-han, the council’s CEO, said while the expiry date had appeared on promotional material, it was not in a prominent position.

Wong said she wanted to remind businesses that the ultimate goal of their schemes was to encourage customer loyalty but poor practices could have the opposite effect.

“When consumers try to redeem rewards and find the terms and conditions unclear, or even find system glitches, then it will damage the relationships between you and the customers instead,” she said.

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The man’s case was later settled after the company gave him back points equivalent to four e-cash vouchers, the council said.

In a different case, a company gave a woman discount vouchers, including one for HK$20 off after spending HK$200 on homewares.

She then bought a product for HK$349, but could not use the voucher at the shop because of a system error.

As many people were queuing behind her, she decided not to argue further and reported the issue to the company via email. It took almost three months for the company to reply.

The council advised consumers to regularly check their account balances at businesses and the expiry dates online to avoid losses.

This article Customer loyalty schemes can do more harm than good if not run correctly, Hong Kong businesses warned first appeared on South China Morning Post

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