When an Air Miles collector checked the value of points in his account last December, he could get a $910 discount on a trip.

But when he checked again in January, he found the number of points remained the same but were now worth $740 on a trip.

He called customer service and learned Air Miles had reduced the value of points used for travel packages without any notice to collectors.

“To have $170 disappear, basically overnight, is just terrible. And I can only think about all the thousands of collectors who are looking forward to booking trips.”

The man, who asked not to use his name because he was afraid his compensation could be revoked, spoke to Air Miles’ office of the president after I forwarded his complaint. What he had lost in points was put back into his account.

LoyaltyOne, which operates the Air Miles program, hinted that something like this would happen after it backed off on a plan to make all points expire after five years.

The first batch of points was to become worthless on Dec. 31. But the company reversed its policy one month before the deadline when the Ontario government banned points expiry for loyalty plans.

The change affects only a minority of Air Miles rewards, a spokesperson said.

“Air Miles Cash remains 95 miles for $10,” Natasha Lasiuk said. “Catalogue pricing on merchandise, standalone flights, plus car and hotel bookings, has not changed.”

Pricing has been adjusted only for the 1.6 per cent of reward redemptions that occur within packaged vacations and cruises.

“This is a subsidized rewards category, requiring a much higher level of customer service and support,” Lasiuk explained.

“Air Miles has provided and continues to provide collectors with an online calculator that enables them to clearly see the value of miles when considering a reward in this category.

“Collectors who had initiated travel discussions with Air Miles travel agents before the pricing change will have their original quoted price honoured.”

Will Air Miles continue to adjust pricing after this? And will its controversial decisions lead some retail partners to drop the loyalty plan?

Allowing members to hold onto points indefinitely was an expensive move. Alliance Data Systems, the Texas-based company that owns LoyaltyOne, reported a $242 million (U.S.) charge against earnings in the fourth quarter.

The company gave little information about the expiry date, creating a last-minute rush of calls last summer. Collectors had to use the phone or live chat. Email was eliminated.

With a shortage of merchandise to buy, many collectors decided to let their hard-earned points expire worthless instead of struggling to use them.

Loyalty plans make money when customers fail to redeem the points they collect. This is called “breakage.”

If five million points are issued and 500,000 points go unspent, the breakage rate is 10 per cent. That is a desirable amount.

A higher breakage rate shows customers aren’t engaged and don’t see the points as valuable. Air Miles’ breakage rate in the fourth quarter was 20 per cent.

“We note that other loyalty plans generally have breakage rates of 15 per cent or lower,” said analyst William Ryan of Compass Point Research & Trading in Washington, D.C.

“As such, we remain skeptical that Air Miles collectors are still receiving significant value out of the program and there is a risk of further adjustments in the breakage rate.”

Ryan gave Alliance Data Systems a “Sell” rating because of weak fourth quarter results. This is an unusual call, since many investment analysts prefer to put a “Hold” rating on a stock whose profits are declining.

Meanwhile, an Air Miles retail partner showed some disloyalty at its annual meeting last month.

Metro, a Quebec-based chain, said it’s contemplating switching from Air Miles to its own loyalty program in Ontario grocery stores after a consumer backlash against its long-time partner.

“It has been rocky this fall with Air Miles, no doubt about that,” said CEO Eric La Fleche, adding that a decision would be made when the Air Miles contract came up for renewal.

My advice: If you collect Air Miles or other loyalty plan points, use them regularly for merchandise, travel or cash discounts. Don’t hoard them for a long time since they can be devalued.

Stay active. Log into your account frequently. Look for any personal messages or information about changes.

Finally, if you find yourself disadvantaged by a new rule that was not communicated properly, speak up. Threaten to leave a loyalty plan that doesn’t value your engagement.

Ellen Roseman appears in Smart Money.

Ellen Roseman appears in Smart Money.

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