Thousands of Aeroplan members received an unpleasant surprise when checking their accounts recently: a clawback of up to 10,000 points. The deduction, which hit TD and CIBC Aeroplan credit card holders, was described as a “welcome bonus adjustment.”
The move caused outrage among the loyalty program’s members, but most affected people were knowingly gaming the system by signing up for multiple Aeroplan credit cards each year and getting repeated bonuses.
This act of churning credit cards is not new, but Aeroplan has finally started enforcing its rules – and it is well within its rights to do so. The abuse of welcome bonuses became so problematic that in October, 2022, Aeroplan changed its terms and conditions and clearly outlined in numerous e-mails that members weren’t entitled to repeat offers.
The program further clarified things in 2023 by stating the one-time bonus applied to each card type (entry, core, premium, core small business and premium small business), regardless of the issuer (TD, CIBC and American Express). The new rules formally came into effect earlier this year.
Despite this clear language and the repeated warnings, some members who recently lost their points are calling the action a theft and have sworn off Air Canada forever. Others have gone as far as joining a class action lawsuit against Aeroplan, which in my opinion is a bit of a stretch.
When reached for comment, Air Canada said in an e-mail it could not say anything about the matter as it was before the court.
Now, no one wants to lose their hard-earned loyalty points, but rewards programs are 100 per cent allowed to take them away if you break the rules, whether intentionally or not.
Interestingly, Aeroplan has been quite generous about the clawbacks. Even though a welcome bonus of 10,000 points was deducted – more if a person had multiple cards – members could keep any additional points earned from meeting minimum spending requirements. To give an example, one recent offer was 10,000 points after an initial purchase and another 35,000 points for spending $1,000 in the first three months.
(Some members only had a partial amount removed from their account, since they didn’t have a balance of at least 10,000 points. Aeroplan has made it clear in letters that any remaining owed points will be deducted at a later date.)
The end result is that, in spite of violating the terms and conditions, some affected members still walked away with 35,000 points and didn’t have their accounts shut down. This is relevant because not every financial institution is as friendly to customers who abuse the system.
American Express banned people who repeatedly signed up and cancelled cards just for the welcome bonus. Those affected had about four weeks to use or transfer their points, and their business was no longer welcome. There was also American Airlines, which shut down accounts of AAdvantage members and immediately took away all their points for similar violations.
That’s not to say the Amex or AA bans weren’t justified. And it’s likely Aeroplan will follow suit if its affected members continue to try and game things.
Every loyalty program will take back points when it’s clear a member is not entitled to them. A common example is the deduction of points earned from a purchase that is later returned.
Loopholes naturally come up, and points enthusiasts always find them. That said, just because an exploit hasn’t been closed or enforced doesn’t mean there won’t be future consequences.
Aeroplan is unique because it has three different credit card partners and five tiers of cards. That’s more than 10 possible Aeroplan credit cards. No other airline in Canada offers anything remotely similar.
Consumers playing within the rules can still earn plenty of Aeroplan points through flying, credit card spending, retail partners, promotions and more. But no one should expect multiple welcome bonuses when applying for the same card type.
Barry Choi is a personal finance and travel expert at moneywehave.com. He was previously affiliated with Aeroplan, TD, CIBC and American Express but currently has no relationship with any of the brands.
