The Risks of Hotel Points and Reward Programs
Whoever came up with the first point reward system knew that consumers are eager to earn freebies.
From airlines to hotel stays, consumers rack up massive quantities of points that can be redeemed for merchandise, free stays/travel, or in some cases cash.
It's a bonus program system that boasts huge participation levels.
The reason these programs work so well is that consumers often forget to use them.
In a recent survey of frequent travelers, 47 percent have never redeemed points or rewards earned through airlines and hotels.
Since most points systems are set up with definite expiration dates for earned rewards, millions of free comps are being left on the table.
Great news for hotels, but what's it doing for your business reputation? If your hotel runs a rewards program, your guests may not understand the limitations of that program.
To alleviate any misunderstanding or unnecessary upset, make sure to communicate in writing, using bold print in a prominent place, your rewards program expiration policy.
Also, if your rewards customers are expecting a rebate and your policy is to give them rewards cards redeemable for merchandise, make sure you've communicated that very clearly.
Case in point - former cell phone service provider Cingular (now AT&T) was sued by customers for sending Visa rewards cards that required merchandise purchases instead of the promised $50 rebate.
Lawsuits surrounding such programs are on the rise.
According to the Better Business Bureau, rebate complaints tripled in less than four years - from 900 in 2001 to more than 2,700 in 2005.
Because rewards programs hold a strong potential for legal action, you as a hotel owner should consult legal advice when putting together or implementing such programs.
Also, check with your hotel insurance broker to understand the types of coverage available to protect against any losses associated with such programs.
From airlines to hotel stays, consumers rack up massive quantities of points that can be redeemed for merchandise, free stays/travel, or in some cases cash.
It's a bonus program system that boasts huge participation levels.
The reason these programs work so well is that consumers often forget to use them.
In a recent survey of frequent travelers, 47 percent have never redeemed points or rewards earned through airlines and hotels.
Since most points systems are set up with definite expiration dates for earned rewards, millions of free comps are being left on the table.
Great news for hotels, but what's it doing for your business reputation? If your hotel runs a rewards program, your guests may not understand the limitations of that program.
To alleviate any misunderstanding or unnecessary upset, make sure to communicate in writing, using bold print in a prominent place, your rewards program expiration policy.
Also, if your rewards customers are expecting a rebate and your policy is to give them rewards cards redeemable for merchandise, make sure you've communicated that very clearly.
Case in point - former cell phone service provider Cingular (now AT&T) was sued by customers for sending Visa rewards cards that required merchandise purchases instead of the promised $50 rebate.
Lawsuits surrounding such programs are on the rise.
According to the Better Business Bureau, rebate complaints tripled in less than four years - from 900 in 2001 to more than 2,700 in 2005.
Because rewards programs hold a strong potential for legal action, you as a hotel owner should consult legal advice when putting together or implementing such programs.
Also, check with your hotel insurance broker to understand the types of coverage available to protect against any losses associated with such programs.
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