February 18, 2022 | Legal News

Loyalty Programs on California’s Radar

The California Attorney General recently made headlines in data privacy circles when he announced an investigative sweep of a number of businesses operating loyalty programs in California on the grounds of non-compliance with the California Consumer Privacy Act (CCPA).

Businesses offering such loyalty programs are required, under the CCPA, to provide consumers with a notice of financial incentive prior to the consumer enrolling in the program. This notice must include information such as (i) a summary of the loyalty program; (ii) a description of the material terms; (iii) how the consumer can opt-in to the program; (iv) a statement of the consumer’s right to “opt out” of the program; and (v) an explanation of how the financial incentive is reasonably related to the value of the consumer’s data, including a good-faith estimate of the value of the data, and description of the method used to calculate the data.

As the enforcement of privacy law continues to gain momentum, franchisors should review their loyalty program and general privacy policies to ensure that they are compliant with the CCPA.

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