RE:outlook
123600 wrote:
air miles seems to be one of the ancors (drag) on this company.
the LCBO has discontinued the awards is that big or not?
iar miles parent is going through some reorg have no idea what that means for the business
I don't own an air miles card and don't fully know the system, but as far as I know, you get rewarded points based on use of a credit card tied to the air miles system, then partner retailers can offer bonus miles based on products or amount of them you purchase, also partners can offer their products in exchange for the points... Am I accurate?
So if a partner, in this case LCBO stops being a partner, you can still earn base points on purchases at their stores with your credit card, but you don't gain an extra 20 points for by Bacardi Vodka... also you don't can't redeem your 25,000 points for a bottle of Jack Daniels. As customer with the LCBO does that stop you from buying the alcohol from the LCBO? Not likely...
As far as our Air Miles ownership in the company, I think that just means that they no longer pay us a base fee or % for participation in the program with us and they can no longer use the branding in thier advertisements and in store and they no longer have their name in our advertisements as a partner.
I'm sure it lowers our income marginally, but I'm also sure were have 100s of partners.
Again this is a base understanding, if anyone has a better understanding please shoot more info...
Also the past couple years, there's been more and more movement and discussions with the LCBO being broken up and no longer being a public customer outlet service and rather just be a supply and control board which was its original intent as shown within the name and remain in the background with the on the store locations being increasingly privatized. If that becomes the case, thier participation in Air Miles or other loyalty products will not matter at all to anyone.
I would view this news as just noise not overly material to us. It would be normal customer churn sort of like a service provider has when they gain or lose a customer, if we had a mass exodus of partners it would hurt the brand alot more.
In my current understanding of the credit card system to which we are somehow apart of to what level I don't know, If you have a Visa card, Visa is not the one backing your loan of money, it is The bank or whoever gave you the card as a account of 'unsecured' credit. Visa has just supplied the payment system and allows retailers you to use thier branding to let customers know that thier care allows for the loan payment. IE I have a Visa Card and an American Express, both are backed by the bank under different rules, but the bank is the one loaning the money for my purchases and they are the ones that control my borrowing limits on each, I can and have moved borrowing limits from a Visa Card to the American Express card, and in my case I've pulled back on the borrowing limits of both my cards and adder thier limits to a unsecured Line of Credit. Now the same has been done with retailer store cards like Sears, Canadian Tire and President's Choice amongst others they become the bank for your loans. I do not know if that is a same case with us and Air Miles, with Air Miles being the banking corporation attached to the cards, I know we have the bonus card you present just to pick up the bonuses, I would be interested to know that interworking. If that is the case, the vast majority of our income royalty would be based on the interest charged on the borrowings for use and not a company being a partner with us.