Dear Business Owner,

Thank you for your interest in Canadian Loyalty.

Canadian Loyalty is a proposed shared rewards network designed to help local businesses attract new customers, encourage repeat visits, and keep more consumer spending within their communities.

Rather than each business operating an independent loyalty program, participating merchants would become part of a shared network where customers can earn rewards at one business and redeem them at another.

Our objective is to create a program that helps merchants attract and retain customers while giving customers flexible rewards for supporting local businesses.

At a glance, participating merchants would join a shared rewards network, award points on eligible purchases, accept points earned across the network, receive settlement for redeemed points, and gain promotional exposure through the Canadian Loyalty website. The program is still being developed, and merchant feedback will help shape reward percentages, operating procedures, and participation requirements before launch.

1. How Canadian Loyalty Works

Customers earn Canadian Loyalty Points when purchasing eligible products or services from participating merchants.

Each Canadian Loyalty Point would have a redemption value of $1. The number of points awarded on a purchase would depend on the participating merchant’s applicable reward percentage.

Customers can accumulate points and use them toward eligible purchases at participating businesses throughout the Canadian Loyalty network.

For example:

A customer makes a $100 eligible purchase at a participating merchant offering 5% in rewards.

Transaction

Amount

Customer purchase

$100

Points awarded to customer

4

Value of points earned

$4

percentage to Canadian Loyalty for service

1%

The customer can save those four points or redeem them toward a future eligible purchase at a participating business.

When a customer redeems points, the receiving merchant would be reimbursed for the full dollar value of points redeemed through the Canadian Loyalty settlement system.

This is an important distinction from a traditional store discount: a merchant accepting points from a customer would receive settlement for their redemption value at point of sale, rather than simply reducing the sale price by that amount.

When the merchant awards points they fund the cost of those rewards. 

When the customer redeems points the merchant gets the full settlement value of the points and it all happens during transaction.

Before the program becomes operational, Canadian Loyalty will establish and disclose the final payment, settlement, accounting, fee, and reporting procedures that participating merchants would be expected to follow.

2. Rewards That Encourage Customers to Return

Canadian Loyalty is designed to give customers an additional reason to choose participating businesses.

Customers who earn points at one merchant can use those rewards at other participating merchants, creating opportunities for businesses throughout the network to attract new customers.

As the network grows, customers would have more opportunities to earn and redeem points while supporting local businesses.

Merchants would also benefit from customers returning to earn additional points and from customers visiting their businesses to redeem rewards earned elsewhere.

3. Reward Percentages Designed for Different Industries

We recognize that businesses in different industries operate with different profit margins.

A craft store, restaurant, hardware store, and service provider cannot necessarily afford to award the same percentage of each purchase in rewards.

Canadian Loyalty is being designed around minimum reward percentages by industry so that participating businesses are not expected to use a single minimum rate across sectors with different profit margins.

Every participating merchant would be required to offer at least their minimum percentage, while choosing the actual percentage offered to customers.

Merchants could use higher reward percentages as a promotional tool to attract customers, encourage purchases, or generate additional business.

We are seeking input from local business owners to help establish reward percentages that are practical for their industries.

4. A Central Website Promoting Local Businesses

Canadian Loyalty plans to provide a central online hub where customers can discover participating merchants, view their products, services, sales, and promotions, and follow links to merchants’ own websites or online stores.

Participating businesses would have opportunities to:

• Promote sales, special offers, and new products or services.
• Direct customers to their websites or online stores.
• Build visibility among customers throughout the Canadian Loyalty network.
• Reach customers who may not otherwise discover their businesses.

By bringing participating merchants together in one searchable location, the hub could help customers explore local purchasing options while directing additional traffic to merchants’ own online channels.

5. Promotional Codes and Merchant Giveaways

Canadian Loyalty is designed to encourage customers to return to the hub, where promotional codes would be offered as they browse participating merchant’s websites or online stores.

Each participating merchant would be required to hold at least one giveaway per year.

Merchants could offer additional giveaways as frequently as they choose. As a giveaway draw date approaches, customers would have a stronger incentive to visit the hub and obtain a promotional code. Each customer could hold no more than 24 codes at one time.

By encouraging customers to return to the hub for promotional codes and giveaway opportunities, these promotions could increase exposure for participating merchants, showcase their products and services, and direct customers to their websites or online stores.

The detailed promotional rules, eligibility requirements, and giveaway procedures will be established before launch.

6. Merchant-Only Testing Before Public Launch

Before opening Canadian Loyalty to the general public, we intend to conduct an initial test stage involving participating merchants.

Business owners would be able to participate as customers and test the program by making eligible purchases with other participating merchants.

This would allow us to evaluate the customer experience, points transactions, merchant settlement procedures, and other essential functions before the public launch.

We are inviting interested business owners to indicate whether they would like to participate in this initial test stage.

7. An Opportunity to Help Shape the Program

Canadian Loyalty is currently in the planning and development stage.

We are inviting local business owners to express their interest and provide input on how the program should operate.

Your participation and feedback could help shape industry reward percentages, merchant promotional opportunities, and the practical requirements of the program.

There is no obligation to join Canadian Loyalty simply by requesting information or completing an Expression of Interest.

Any future participation agreement, financial obligations, fees, and operating requirements would be presented for review before a merchant makes a binding commitment.

Take the Next Step

If you believe Canadian Loyalty could benefit your business, we invite you to complete the attached Expression of Interest.

Your response will help us understand merchant interest, identify potential participants in the initial test stage, and demonstrate the level of local business support for the proposed network.

Together, we have an opportunity to build a shared rewards network that gives customers more reasons to support local businesses and gives participating merchants more opportunities to attract new customers and encourage repeat visits.

Thank you for your time and consideration.