FlyBuys (Australia)

FlyBuys (Australia)
Entity:	Loyalty program
Established:	1994
No. cardholders:	over 10 million
Owner:	Coles
Major retailers:	Coles, Kmart, Target, BI-LO
Major rewards:	Gift cards, merchandise
Website:	www.flybuys.com.au

FlyBuys is Australia's largest loyalty program, with over 10 million FlyBuys cardholders in over 5.5 million Australian households. It is owned by Coles. Members collect points from household consumer purchases (and through credit card use) and subsequently exchange points for gift cards, merchandise, flights and other rewards.

In a survey conducted by Monash University in December 2009, FlyBuys was ranked by respondents as "most worthwhile joining" among major Australian loyalty programs.

History

FlyBuys began in 1994 as a joint venture of Shell, Coles Myer (now Wesfarmers) and National Australia Bank. The program met with substantial interest at launch, with a million Australian households joining within the first six weeks.

Telecom Australia (now Telstra) joined the program in 1995 but withdrew after two years, having created the Telstra Visa Card with ANZ (later to become the ANZ Qantas Telstra Visa Card).

In 1996, Loyalty Pacific licensed the FlyBuys brand to a consortium in New Zealand, which has operated a similar program since (see Fly Buys (New Zealand)).

In 1998, major changes were made to the program. The offer to members was diluted as the points currency was devalued to increase points required for rewards 20-fold (from a minimum 550 points to 11,000), but standard points issuance only increased fourfold (from 1 point for $20 to 1 point for $5). At the same time, Shell relinquished its one-third ownership of the program, although this was unnoticed by members as Shell continued to issue points through its service station network.

In 2003, the program was revamped, this time with the offer improved for members, with standard points issuance for participating Coles Group brands increased to 2 points for $5. This change was accompanied by revised branding and a minor name change from “Fly Buys” to “FlyBuys”.

In December 2006, Loyalty Pacific was cited as a potential purchaser of the Qantas frequent flyer program.

In February 2011, Coles acquired National Australia Bank's 50 per cent interest in FlyBuys, with NAB remaining as a major participant in the program.

Collecting points

FlyBuys points collection is directed largely at regular consumer purchases, and most points are issued by the major Wesfarmers brands – food (Coles Supermarkets and BI-LO), fuel (Coles Express), discount department stores (Kmart and Target), liquor (Liquorland) and car servicing (Kmart Tyre & Auto Service).

Additional points can be collected from transactions on selected NAB credit cards or the Coles Myer Source MasterCard (issued by GE Australia) if they have been “linked” to a FlyBuys membership. This allows in some circumstances for points to be gained from two sources for the one transaction. E.g. if a member pays for grocery purchases at Coles Supermarkets with a NAB credit card, each of Coles and NAB would issue points for the one transaction.

Several brands not associated with the joint venture also issue FlyBuys points, including Best Western, Budget Rent a Car, Jetset, Travelworld, Curves and Solar Shop Australia.

In most cases points accrue at the rate of 2 for every $5 spent. The participating retailers also issue additional bonus points on a promotional basis. Points have a life of 3 years.

Myer, having been sold by Coles Group in June 2006, withdrew from FlyBuys at the end of January 2007. EziBuy (which purchased a former Coles Myer brand, Myer Direct), left the program in March 2008. Other former participants include Michael Hill Jeweller and Elders Real Estate. Others such as Red Rooster and Katies were businesses divested by then Coles Myer. Traveland, Megamart, Newmart and Pulse Energy are now-defunct businesses which were once FlyBuys participants, while Sports Direct, Primary Layers, South Cape and Gifts To Go were short-lived Coles Group brands long discontinued. Officeworks and Harris Technology withdrew in 2009.

Rewards

Initially, the only FlyBuys rewards were flights. However, this was extended by 1996 to include other rewards with a travel or leisure theme, such as accommodation, meals and entertainment. By 1999, a $100 Coles Myer shopping voucher reward was introduced, and general merchandise items followed. By 2009, most rewards taken were gift cards or credits to credit card balances and flights were a small proportion of rewards taken. According to FlyBuys, over ten million rewards have been redeemed by members and there are over 800 reward choices.

Criticism

FlyBuys has been criticised regarding the perceived effort required to collect enough points to gain a reward. For many years, no rewards were available for less than 11,000 points, encouraging critics to claim that $55,000 was required to be spent to gain a reward with a value of around $100. However, since 2006, awards have been available from 2,500 points.

FlyBuys also attracted concerns regarding privacy of information and the ability for the operators to track members’ shopping habits. In 1994 FlyBuys adopted a privacy policy based on OECD principles in which it advised members it may use personal information such as name, age, gender, employment status and age of family members "for marketing, planning, product development, research, FlyBuys account administration and fraud and crime prevention and investigation." FlyBuys varied this policy in 2006 to enable information to be passed to Coles Group and National Australia Bank, the owners of the program, unless directed otherwise by members. In 2009, FlyBuys' responsible privacy practices were recognised with the conferring of an Australian Privacy Award.

See also

• Loyalty card
• Everyday Rewards (Australia), a program run by Woolworths Limited

External links

• FlyBuys