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Challenges to loyalty programs continues in Alberta, Canada

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Challenges to loyalty programs continues in Alberta, Canada

5 provinces including the two most populous, Ontario and Quebec, have placed a ban on loyalty programs that reward customers for prescription drug purchases and other pharmacy services. The logic behind the ban is that incentives may distract consumers from responsible decision making. Clearly the legislative bodies throughout Canada share a world view of loyalty marketing where programs are built to do no more than “bribe” the customer in exchange for making a purchase.

How you view the ethical implications of loyalty programs emanates from your personal world view of loyalty marketing, a topic we’ve addressed here.

Now, at the behest of grocery chain Sobey’s, the superior court in the province of Alberta has temporarily stayed the ban pending further review. The judicial review of the Sobey’s filing is scheduled to be heard by the court in January 2015 and, until then, customers will be allowed to collect loyalty currency including that of the popular AirMiles program in participating pharmacies.

In our view, the logic behind the ban is flawed. The regulatory body effectively portrays consumers as simple-minded people whose decision making power over their choice of pharmaceuticals can be influenced by a single point of evaluation, in this case a smallish rebate.

Thinking of the choice of medications available for all types of medical conditions, there are multiple considerations to be evaluated including recommendations from doctors, interaction with other drugs being taken, and the long list of potential risks and side-effects from taking any prescription drug, all of which are disclosed in the fine print of documents accompanying each prescription.

The regulatory bodies also ignore the range of existing incentive programs in market offered by the pharma companies themselves. The benefits of these programs are generally more significant than the impact of collecting a few air miles, yet are an accepted industry marketing practice.

Awarding AirMiles or other promotional currency in conjunction with prescription purchase should be positioned as a tool to increase compliancy, a key determinant of realizing the potential of any pharmaceutical. It is also an effective way to create a feedback loop with patients and to improve satisfaction levels with the drugs themselves.

We’ll keep an eye on the progress of the Sobey’s appeal and the legal review planned for next year.

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