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The Québec Superior Court recently authorized a class
action against Shoppers Drug Mart and Pharmaprix (the
"Defendants") in connection with the "Pharmaprix
Optimum" customer loyalty program.
The program allowed members to earn points through purchases
made at participating stores, which could later be exchanged for
rebates.
On July 1, 2010, the Defendants unilaterally and without notice
changed the terms and conditions of the loyalty program by
decreasing the exchange value of points accumulated by members.
This also retroactively reduced the value of all points which had
been previously earned through the program. Option consommateurs
and the class representative, Pierre Guimond (the
"Plaintiffs") are demanding that the Defendants maintain
the previous exchange rate for all customers who became members of
the Optimum program before July 1, 2010, until the expiry of their
rights under their membership agreements in 2017. Although the
membership agreements contain a clause which specifically allows
the Defendants to make unilateral changes without notice, the
Plaintiffs argue that such clause is illegal and abusive, and
should thus be of no effect.
The court affirmed that the facts alleged by the Plaintiffs
disclosed a sufficient cause of action to warrant authorizing the
class action. It will now be up to the trial judge to determine
whether or not the Defendants' modifications constituted an
abuse of rights, and thus whether or not the previous exchange rate
must be reinstated.
We strongly encourage companies offering loyalty programs to
watch this case closely as the court's finding will likely have
an impact on loyalty programs offered in Québec, the wording
of program terms and conditions and any changes made to such terms
and conditions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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