Rewards program on the brink of collapse

One of Australia’s largest loyalty programs that services companies such as Myer, iSelect, Hoyts and GE Money, in said be on the brink of collapse. This could potentially leave more than 700,000 customers who use these rewards programs in limbo.

The provider, The Lifestyle Rewards program is facing insolvency proceeding over failing to pay the Australian Tax Office a $536,000 tax debt.

The Lifestyle Rewards program Director Edward Malkoun is also being pursued by the ATO after running up $1.87 million in income tax bills going back to 2007

A collapse could mean that the program’s customers will be left without any entitlements despite years of loyal shopping.

In the worst case scenario it could be similar to what happened to the frequent flyer members caught out after Ansett’s failure in 2001.

”The members got nothing. Once the employees got their entitlements and the administrators were paid, there was nothing left,” said Jon Caneva, former spokesman for the now-defunct Ansett Global Rewards Action Group.

Lifestyle Rewards promotes itself as the ”pioneer and leading provider” of loyalty cards in Australia. The card holders who shop with certain retailers earn points that can then be cashed in for goods and services from companies including Myer, Hoyts, Coles, Woolworths, JB Hi-Fi, Aquila, GE Money, iSelect and Medibank Private.

The threat of collapse has meant that several large companies have allegedly started to withdraw from the program.

Representatives from Coles and Woolworths have said that they have no relationship with Lifestyle Rewards and do not know why their logo is being used in promotional materials.

It will be interesting to see how this develops over the coming weeks…

Do you use rewards cards, or were you affected by the Ansett rewards collapse?