Loyalty Program Pitfalls: What to Watch Out For in 2025

Loyalty programs promise rewards and savings, but 2025 brings new risks for Canadian consumers. From point devaluations and expirations to rising fraud and a lack of legal recourse, it's more important than ever to stay vigilant. Here's what to watch out for—and how to protect yourself and your hard-earned points.

1. Devaluations: Your Points May Be Worth Less Overnight

One of the biggest pitfalls in loyalty programs is devaluation—when companies change the rules, requiring more points for the same rewards or reducing the value of your points. For example, Aeroplan announced a major devaluation effective March 25, 2025, moving many airline partners to dynamic pricing. This means the number of points needed for a flight can fluctuate with demand, often making redemptions more expensive and unpredictableaeroplan-devaluation-coming-in-march-2025" target="_blank">29. Such changes can happen with little notice, eroding the value you've built up.

How to protect yourself:

Book travel or high-value rewards before announced devaluation dates.
Monitor program updates and be ready to act quickly if changes are announced.
Consider diversifying your points across multiple programs to reduce risk.

2. Points Expiration: Use Them or Lose Them

Many programs enforce points expiration policies, wiping out your balance if you don't use or earn points within a set period. Some use fixed dates, while others base expiration on inactivity3. For instance, points in some programs expire after 12 or 24 months of inactivity, while others have annual or even quarterly expirations.

How to protect yourself:

Know your program's expiration rules—find them in the terms and conditions or your account dashboard3 7.
Set reminders to use or earn points before they expire.
Opt in to expiration warning emails and notifications.
Redeem for small rewards or donate points if you're at risk of losing them.

3. Fraud: A Growing Threat

Loyalty program fraud is skyrocketing, with attacks increasing by nearly 90% year-over-year between 2022 and 20234. Both external hackers and internal employees can exploit program vulnerabilities. Common schemes include account takeovers, fake accounts, and unauthorized redemptions. Cybercriminals use stolen credentials to drain points, which are then resold on the black market4 11 12.

How to protect yourself:

Use strong, unique passwords for each loyalty account6 11.
Enable multi-factor authentication if available12.
Regularly monitor your account for suspicious activity11.
Beware of phishing emails and scam websites asking for your login details11.
Never share your login credentials or codes with anyone.

4. Lack of Legal Recourse: Few Consumer Protections

Unlike cash or credit, loyalty points aren't regulated as currency. Program providers can unilaterally change terms, devalue points, or even terminate programs with little warning—often leaving consumers with no legal recourse5. While consumer advocates have called for stronger protections, most provinces still lack specific regulations for loyalty rewards.

How to protect yourself:

Read the terms and conditions before joining or investing heavily in a program.
Keep records of your points balances and any communications regarding changes.
Be proactive—redeem points regularly and don't hoard them for years.
Support calls for clearer regulations and consumer protections.

5. Other Pitfalls: Overwhelm and Inactivity

With the market saturated by loyalty offers, it's easy to join too many programs and lose track of your balances1. Inactivity, forgotten accounts, and scattered points can lead to missed rewards or lost value.

How to protect yourself:

Focus on a few programs that best match your spending habits.
Track your points and redemption options using apps or spreadsheets.
Stay engaged: activate offers, participate in promotions, and keep your accounts active.

Conclusion: Stay Informed, Stay Protected

Loyalty programs can offer real value, but only if you're aware of the risks. Devaluations, expirations, fraud, and limited legal protections are real threats in 2025. By staying informed, monitoring your accounts, and redeeming points regularly, you can enjoy the perks—without falling into the pitfalls.