Loyalty program

We advised a foreign e-commerce platform operator on the project:

INTRODUCTION OF A LOYALTY PROGRAM
FOR CUSTOMERS

For our client, a leading foreign entrepreneur from an EU country in the e-commerce industry, we performed a legal analysis of the planned implementation of a loyalty program for its customers under Polish law.
Loyalty programs are an important part of the marketing strategies of many companies, enabling customers, including consumers, for example, to enjoy additional benefits as rewards for frequent use of a given company’s services. From year-to-year there is an increase in their popularity, resulting in the development of new, more attractive forms of these programs. The dominant model on the market is a loyalty program based on the accumulation of points for purchases, which the customer can later “exchange” for rewards or discounts.

Before introducing a loyalty program, a thorough legal review of the planned solution is essential. In particular, it should be ensured that the way the model is shaped does not violate applicable regulations (e.g. payment services regulations or gambling regulations). As a standard, one should keep in mind the regulations on personal data processing (including the need to ensure an adequate basis for data processing and possible issues related to changing the purpose of processing customer data). It is equally important to adapt the program’s regulations to the requirements of consumer law, in order to avoid accusations of violating consumer rights. Finally, in the case of cross-border activities in the EU in the broadest sense, it is necessary to keep in mind the threads concerning the choice of applicable law. The legal framework in this regard for contractual obligations is set by the Rome I Regulation.

DLK’s advice included:

• legal analysis of the planned implementation of a loyalty program
• review and evaluation of the model in terms of its compliance with Polish law, taking into account payment services regulations, gambling regulations, e-commerce market regulations, personal data protection law and consumer regulations
• preparation of a legal opinion with practical recommendations as to the desired design of the loyalty program