A punch card, points in your POS, stored value cards and a third party app are four different legal exposures rather than four designs, and since 9 November 2023 relying on an unfair term in loyalty terms has been banned in Australia, not merely void.
Skai Solutions answers the phone for Australian and New Zealand venues, which means we see a lot of marketing spend decided before the basics are, and loyalty is the usual first purchase. Every figure below comes from the ACCC or the Commerce Commission, is dated, and is linked so you can check it. None of it is legal advice.
Strip the branding off and there are four categories, not forty. They differ in what they cost you, what they tell you about your customers, and how much legal surface they create.
| Approach | What it costs | What you learn | Legal surface |
|---|---|---|---|
| Paper punch card | Printing, and the discount you give away | Nothing. No name, no contact, no spend history | Almost none. No terms, no account, nothing to vary |
| Points in your POS | Usually bundled in the POS plan you already pay for | Spend per head, visit frequency, what each regular orders | A standard form contract. Terms, balances and expiry rules |
| Stored value or gift cards | Card stock plus processing on the top up | Redemption patterns, and cash in advance | The gift card regime, including a three year minimum expiry in Australia |
| Third party loyalty app | A monthly fee, often per venue | The most, but the app owns the relationship | Their terms plus yours, and a data handling question |
The punch card is the only one of the four with no account behind it, which is why it survives in cafes long after everyone declared it dead. It is also the only one that teaches you nothing. Everything above it buys information and creates obligations at the same time, in roughly equal measure.
If it has terms and an account, yes, and this is the part that gets missed. A points scheme you sign a customer up to is a standard form consumer contract, which puts it inside Australia's unfair contract terms regime.
The ACCC's own guidance on contracts, last modified 21 July 2026, sets out what changed. From 9 November 2023, proposing, using or relying on an unfair term in a standard form contract is banned, with penalties. Before that date an unfair term was simply void if a court said so. Now the act of relying on it is itself unlawful. The date matters: it applies to contracts made or renewed, and to terms varied or added, on or after 9 November 2023. A loyalty scheme whose terms you updated last year is inside it.
A term that is declared unfair is void, and the rest of the contract continues if it can stand without it. So the risk is not that your whole scheme collapses. The risk is the penalty attached to having used the term at all.
The ACCC describes a three limb test. A term is unfair if it causes a significant imbalance between the parties, AND it is not reasonably necessary to protect the legitimate interests of whoever benefits from it, AND it would cause financial or other harm if it were enforced. All three have to hold.
Then the example worth reading twice, in the ACCC's own words on that page: among the terms it names as unfair are "terms that penalise one party (but not the other) for breaching or ending the contract". Read your own loyalty terms against that sentence. A clause letting you cancel accrued points at any time, for any reason, with no equivalent right on the customer's side, is close enough to that description that it is worth a lawyer's half hour.
There is an exemption and it does not rescue you here. The regime does not apply to terms that set out the upfront price to be paid, or that define the main subject matter of the contract. The price of a coffee is exempt. The rules about what happens to a balance you have already earned are not an upfront price.
Two honest caveats. We are not lawyers and this page is not legal advice. And no court has ruled on a hospitality loyalty scheme in these terms as far as we have seen, so treat the test as the test rather than as a prediction.
More than it used to, and the figures are published. The ACCC's fines and penalties page, last modified 13 July 2026, sets a penalty unit at A$364 from 1 July 2026. For conduct on or after 28 March 2026 the maximum pecuniary penalty per breach for a corporation is the greater of A$100,000,000, three times the benefit obtained, or 30 per cent of adjusted turnover for the breach period. For an individual it is A$2,500,000. Infringement notices run at A$21,840 for a corporation, A$218,400 for a listed corporation and A$4,368 for an individual.
Those ceilings are built for conduct at national scale and no suburban venue is going to meet one. Say that plainly rather than pretending otherwise. The number that should concentrate the mind is the infringement notice, because A$21,840 is a real amount of money for a single site and it does not need a court. Date the figures too: the ACCC states that conduct before 28 March 2026 uses the maximum that applied at the time, so never quote A$100m as though it always applied.
The cheaper exposure is the one nobody budgets for: a balance dispute at the counter during service. That is a staffing cost, not a legal one, and it is the reason the punch card refuses to die.
No, and the difference is structural rather than cosmetic. New Zealand extended its unfair contract terms provisions to standard form small trade contracts on 16 August 2022, and the Commerce Commission's guidance on unfair contract terms applies a similar test: significant imbalance, detriment to the customer if the term is relied on, and not reasonably necessary to protect legitimate business interests.
The enforcement route is what differs. In New Zealand the Commission must apply to the court for a declaration that a term is unfair, and only then is it an offence to apply, enforce or rely on it. In Australia the ban bites without that step. Maximum Fair Trading Act penalties are NZ$200,000 for an individual and NZ$600,000 for a business, with a NZ$1,000 infringement notice for certain breaches. Terms describing the main subject matter and setting the price are exempt, provided they are clear and displayed prominently.
So a group running venues on both sides of the Tasman cannot write one set of loyalty terms and assume it behaves identically. The test is similar. The consequence of failing it is not.
By the kind of venue you run, not by what the category is doing.
And the concession that makes the rest of this credible: if your phone is going unanswered during service, a loyalty program is the wrong thing to spend this month on. Loyalty increases the value of a customer you already have. An unanswered phone loses the ones you have not met yet.
If part of your loyalty thinking was built on passing card costs to customers, that route closed. The ACCC's card surcharges page, modified 2 October 2026, states that from 1 October 2026 businesses can no longer add a surcharge for payments made with Visa, Mastercard, American Express and eftpos cards. Hospitality weekend and public holiday surcharges are a different regime and are not affected. What it means for a loyalty discount is simple arithmetic: the card cost now sits in your margin, so a 10 per cent loyalty discount costs you more than it did in September. The detail is in our card surcharge ban page and the underlying rates are in restaurant merchant fees.
Every approach above is a way of getting more out of the customers who already found you. None of them does anything about the ones who rang during service and got a voicemail, and that is usually the bigger number. A regular you reward twice a month is worth real money. So is the table of six that called at seven on a Friday and booked somewhere else at four past.
Skai Solutions answers the phone for Australian and New Zealand venues, takes the booking, and logs the call so you can see how many there were. Setup takes five days. If you want to see what your own missed calls look like before you spend anything on loyalty, that is what a demo is for.
What is the best loyalty program for a restaurant?
There is no single best one, and the honest answer depends on how many sites you run. A single cafe is usually better off with a punch card, because it creates no account and no terms to argue about. A restaurant whose POS already includes loyalty should turn that on, because the marginal cost is near zero. A third party app earns its monthly fee at about three sites and rarely below that.
Is a restaurant loyalty program a legal contract?
If it has terms and customer accounts, it is a standard form consumer contract, which puts it inside Australia's unfair contract terms regime. The ACCC states that from 9 November 2023, proposing, using or relying on an unfair term in a standard form contract is banned with penalties, and that this applies to contracts made or renewed, and terms varied or added, on or after that date.
Can a restaurant cancel a customer's loyalty points?
Be careful with a term that lets you do it at any time for any reason. Among the terms the ACCC names as unfair are terms that penalise one party and not the other for breaching or ending the contract. That is not a ruling about loyalty points, but it describes a one sided cancellation clause closely enough to be worth legal advice. This page is not legal advice.
Do loyalty points have to expire after three years like gift cards?
Points and gift cards are different regimes. The three year minimum expiry applies to gift cards and vouchers in Australia. A points balance in a loyalty scheme is governed by the scheme's own terms, which is exactly why those terms sit inside the unfair contract terms rules instead.
What are the penalties for an unfair term in Australia?
The ACCC's fines and penalties page puts a penalty unit at A$364 from 1 July 2026. For conduct on or after 28 March 2026 the maximum per breach for a corporation is the greater of A$100,000,000, three times the benefit obtained, or 30 per cent of adjusted turnover, and A$2,500,000 for an individual. Infringement notices are A$21,840 for a corporation and A$218,400 for a listed corporation.
Is New Zealand the same as Australia on loyalty terms?
The test is similar but the enforcement is not. In New Zealand the Commerce Commission must apply to the court for a declaration that a term is unfair, and only then is it an offence to apply or rely on it. Maximum Fair Trading Act penalties are NZ$200,000 for an individual and NZ$600,000 for a business. The provisions were extended to standard form small trade contracts on 16 August 2022.
Does the card surcharge ban change what a loyalty discount costs?
Yes, in arithmetic rather than in law. The ACCC states that from 1 October 2026 businesses can no longer surcharge Visa, Mastercard, American Express and eftpos card payments, so the card acceptance cost sits in your margin. A percentage discount therefore costs more than the same discount did before that date.