Rules & Resources
Consumer Magazine Support Center

Loyalty Point/Award Point Program Policy (Updated March 2006)

At the November 2004, the board of directors adopted loyalty point guidelines.

At the March 2006 board meeting, the board of directors passed an action that REQUIRES any magazine (or its agents) wishing to develop and execute loyalty point programs to obtain ABC pre-approval of these programs – prior to launch.

To have your programs pre-approved we require that you fill out the Loyalty Point Pre-Approval Form (DOC) and send it your ABC publisher relations manager for review.

Loyalty Point Programs

Definition/Purpose:
The general purpose of loyalty programs is to build brand loyalty and increase sales volume of discretionary goods and services. Loyalty programs are structured so that a specific volume of transactions is required in order for a customer or a program member to earn sufficient award credits to redeem an award. Each time a customer or program member purchases a product or service, or performs a specific action as a requirement of the loyalty program, he or she earns award credits that, subject to the specified thresholds, may be redeemed in the future for awards such as free or deeply discounted products or services.

Qualification Standards:

1. Enrollment
All programs must include an enrollment process that makes a clear link to the “host” organization; e.g., the organization attempting to build brand loyalty and/or increase sales volumes. This enrollment process will require the consumer's affirmative action when enrolling in the program.

2. Point Activity Requirements
The program participant should be knowledgeable of the specific activity/action required to earn points and the volume of points that can be earned with each specific activity.

3. Point Accrual
Participants must be able to accrue points to be used toward future redemption opportunities. In addition, participants should have access to account status on a regular basis.

4. Initial Award of Points
If points are given for enrollment, participants may not initially receive more than 35 percent of the points needed to obtain the least expensive product/service offered in the program.

5. Point Values
Per-point valuations must be established as follows:

  1. All items offered for redemption of points must include a stated value for all items being offered.
  2. All award point programs must include the option for redemption of points for items other than magazines. The mixture of magazines and non-magazine items should be one in which at least 20 percent of all products offered for redemption be non-magazine items. In addition, at least 50 percent of those non-magazine items must be commercially available (i.e., available in the public domain) for consumer purchase.
  3. Commercially available products included in the program must have values lower and higher than the value of all magazines included in the offer.
  4. The assigned point value for each program should be based upon the number of points required to redeem the lowest valued commercially available product (product value divided by assigned points equals per-point value).
  5. The number of points required for redemption of all products and services offered (magazine and non-magazine) should be an extension of the per-point value calculation in “d” (above) times the stated value. This must be applied consistently across all award items (magazine and non-magazine).
6. Average Price Impact
The amount to be allocated to the average price calculation formula will be equal to the per-point value times the number of points required to purchase the subscription.

7. Point Expiration
If an expiration date is established, the date must allow for sufficient accumulation of points necessary to redeem the highest valued item prior to points expiring.

8. Disclosure
The average number of copies served in the period from loyalty point programs will be reported in Paragraph 6, with an explanation in the explanatory paragraph of Publisher's Statements and Audit Reports. The explanation will need to include the value of each point throughout the program.

See also Rule F 8.9 Subscriptions Purchased with Award Points


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Updated 3/14/06