If you’re like me, you wake-up in the morning and purchase your cup of coffee, but while you’re at the cash register you ensure to collect your points towards your next reward. Loyalty points and rewards programs have become embedded into our life to reward us with free perks in exchange of being loyal customers.
Unfortunately, loyalty and rewards programs are in jeopardy of disappearing under the California Consumer Privacy Act 2018 (CCPA). This is because it is unclear in this new privacy law that goes into effect January 1 whether businesses can continue to offer these programs without risk of lawsuits. Many businesses will decide to eliminate these loyalty and rewards programs for anyone with a California zip code.
If loyalty and reward programs disappear, it will send shockwaves amongst the various industries affecting all businesses, large and small. In the City of Long Beach there are thousands of businesses, the majority of which offer customers the opportunity to opt-in to their rewards programs. We are deeply concerned about ensuring that loyalty and reward programs stay in place as this will impact our members and our community tremendously.
Here at the Long Beach Chamber of Commerce most of our local businesses have some sort of loyalty program. Consumers in today’s world love their loyalty and reward programs. These are voluntary opt-in programs where in exchange for a little bit of information about the consumer they can get big savings.
Most of us have had conversations with a friend or family member on how to accumulate more rewards or maximize on purchases to earn more rewards. That’s because to a savvy consumer, the benefits are endless. Consumers are proud to share their free perks and free items they received with their family and friends.
Consumers use loyalty and rewards programs at the grocery store, to travel, buy new clothes, eat at their favorite restaurants, and at their local coffee shop, the list goes on and on. Through these programs, consumers are able to save money and continue visiting their favorite shops.
Loyalty programs make great economic sense for local Long Beach businesses. In fact, marketing experts estimate that existing customers spend 67% more than new customers. From a business standpoint, it costs as much as twenty-five times more to recruit new customers than to provide for existing customers. For many of our struggling small businesses, it is a way to stay connected and share information with their customer about products, meals or services they may be interested in.
For example, some loyalty program at groceries stores allow families to save money on items in many ways. They can save money on sale items, earn rewards for future items, save money on gasoline, and earn coupons for buying related items or more of the same.
Loyalty and rewards programs bring businesses closer to their consumers because they are a win-win scenario between customers and businesses. Businesses are able to narrow their product base to what consumers want and customers are potentially able to save big money.
Right now, the California legislature has the chance to get it right and protect loyalty rewards programs. AB 846 (Burke, Low, Mullin) will make a minor clarification to the CCPA that would protect rewards programs. Consumers will always have the choice to opt-out of these programs, but AB 846 will ensure that privacy for consumers will be protected without giving up their rewards programs.
The legislature passed the Privacy Act to protect consumers from hackers and the unwanted sharing and storing of personal data. An idea that is important to consumers in the digital age but without a needed clarification in the law, consumers will lose.
We encourage our legislators to support AB 846 and the other important fixes that will clarify potential unintentional consequences that will harm everyone.