Airline loyalty schemes continue to disappoint

Avios have recently shaken up the way that they are awarding and managing points. It is explained well in this Sunday Times article. The main thrust is that Lloyds and TSB customers’ rewards points are being cut back if they collect with American Express. Whereas before the Lloyds Avios Duo Card which paid one point for every £1 spent on Amex, this is now being replaced by the Avios Rewards Mastercard which pays only 0.4 points for every £1 spent, with Amex no longer being a valid payment vehicle.

This is a prime example of the problem with most loyalty reward schemes: there is a fundamental conflict of interest with the place of earning and redeeming of loyalty points being the same. In this BA Avios example, it is completely in BA’s power to determine the value of the points which leaves the customer completely out of control.

Koin Rewards offers an ideal alternative to this. When someone makes a purchase at a retailer, the value of the Koin that they earn is determined, not by Koin Rewards or the retailer (as it would be with most schemes), but by the market as this will be a freely traded currency.