Loyalty Programs and Privacy in Canada

What applies to you

PIPEDA, the Personal Information Protection and Electronic Documents Act, governs personal information collected in the course of commercial activity across most of Canada. Alberta, British Columbia and Quebec have their own provincial privacy laws that apply to businesses operating there, and Quebec's regime imposes additional obligations.

Separately, Canada's anti-spam legislation (CASL) governs commercial electronic messages. If your loyalty program sends marketing emails or texts, CASL applies to those messages independently of your privacy obligations.

Consent has to be meaningful

The central requirement is meaningful consent: the customer understands what you are collecting and why, at the time you collect it. In practice this means enrolment cannot be a phone number typed into a terminal with no explanation.

It also means marketing consent is separate from program consent. A customer joining a loyalty program has consented to you tracking their points — not to receiving promotional texts. Those need their own opt-in, and CASL requires you to be able to demonstrate you have it.

Collect less than you think you need

Access, correction and deletion requests

Customers can ask what personal information you hold about them, ask you to correct it, and withdraw consent. You need to be able to actually answer — which means your loyalty system needs to be able to export and delete a customer record, not just deactivate it.

This is worth checking before you choose a platform. "Can I fully delete a customer on request?" is a question with a surprising number of unsatisfying answers, and inability to comply is your problem rather than the vendor's.

Retention and breach obligations

Personal information should not be kept longer than needed for the purpose it was collected for. For a loyalty program that generally means retaining data while the account is active, then purging after a defined period of inactivity. Set that policy explicitly rather than keeping everything forever by default.

Under PIPEDA, breaches posing a real risk of significant harm must be reported to the Privacy Commissioner and to affected individuals, and you must keep records of breaches regardless of whether they meet the reporting threshold. Ask any vendor what their breach notification commitment to you is, in writing.

Practical setup checklist

How Sopoints handles this

Sopoints captures explicit consent at enrolment, records marketing opt-in separately from program enrolment, supports customer data export and deletion, and encrypts personal information in transit and at rest. Guest data collected through the waitlist product is purged automatically on a schedule.

That gives you the mechanisms, but the obligations remain yours — the privacy notice your customers see, the fields you choose to collect, and the retention period you set are all decisions you make.