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Loyalty and Rewards Agreemeent

Effective Date: Feb 16, 2025

This Loyalty and Rewards Agreement applies to Contractor’s Subscription Service as provided pursuant to terms of that certain Master Subscription Services Agreement between Customer and Contractor dated effective as of the Effective Date of the Master Agreement (MSA).  Capitalized terms used herein and not defined shall have the meaning ascribed to them in the Agreement.

1. Messaging Rules and Best Practices

It is important to understand that sending messaging to customers has become a highly regulated space, and brands and vendors are required to adhere to the guidelines set by carriers and state and local governments.

First, SMS message send-from numbers must be approved by carriers, and these numbers can also be blocked by carriers.  The reasons for carrier blocking can sometimes feel arbitrary and reasons may not be made clear, so it is important to follow ethical best practices.  

Customer understands and agrees to the following rules and best p

1.1 Individual blocking: Members can mark Brand messages as "spam" at any time, so only send high-value messages.  If an individual marks a Brand's "sent from" number as spam on a bad message, all future messages intended for that Member will be blocked. Members will not receive your good messages after blocking a bad one.

​1.2 Total number blocking (All users): If enough users mark a message as “spam” (for example, a low value campaign), carriers have the right and tendency to block ALL future sends from your brand immediately.  If Brand's send-number is blocked, no other members can receive messages even in that campaign. Customer understands that the cost of resolving this issue with the carrier starts at $3,000 and and can take weeks to resolve with no messages sent in the meantime.

1.3 DO provide high value content such as discounts or points multipliers  

1.4 Avoid low-value “informational” messages. Announcements such as new product availability are not suited for SMS, and lead to blocking or being marked spam.

1.5 Avoid lengthy messages.  Shorter is better. Long messages get marked spam more often.

1.6 Messages must NOT be sent during quiet hours (7 p.m.–8 a.m.)

1.7 Do not over-send. Best practice is to send to a member maximum once per week, or members can become annoyed and mark as spam. (See 1.1 and 1.2)   To avoid this, the system will automatically eliminate members from the target list at send time if they have been sent a message in the last 2 days.  

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2. Short codes  

Note that “Short Codes” are available for an extra fee.  Short codes are dedicated 5 or 6 digit long numbers tied to a brand and are only used for SMS messaging.  Consumers recognize short codes as being “more official looking” and carriers tend to block them less frequently.  But there is a pass-though cost of ~$1000/month to lease a short code.  

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3. Brand Privacy Policy and TOS

Customer agrees to post a carrier-approved TOS and privacy policy clearly visible on its website that phone carriers can reference while provisioning mobile numbers.

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4. Member Terms of Service

Customer will specify the following Member Terms of Service provisions, or defaults will be used.

4.1 Member Points Expiration: 15 months inactive

By default, points will expire 15 months after Member’s last activity date

The standardf range is 12 months to “never expire”.

4.2 Member Account Deletion: 24 months inactive

By default accounts will be deleted 24 months after the Member's last activity date.

The allowed range is 15 months to “never delete”.

Deleted accounts will not be charged, and Member Data will be removed from the POS and reporting. Deleted Members may re-join but they will be treated as "all new" with no history.

4.3 Warning Messages  Before expiring points or deleting old accounts,Members are sent 2 warning messages with a win-back offer (such as 50% off or a free item) prior to points expiration or account deletion events.

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5. Data Ownership

Contractor agrees to operate a Loyalty and Rewards program on behalf of Customer.  When Buyers (Consumers) join the Program, supply their phone number and opt in, they become Members.

Customer owns the Member phone numbers, subject to terms and conditions in this agreement (including Non-Circumvention) and the MSA.  Contractor is granted a non-exclusive, royalty-free worldwide license including a license to store, record, transmit, maintain, display and use Buyer or Member data for its business purposes and in its licensed services, but Contractor is explicitly prohibited from selling Buyer or Member phone numbers.

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6. Non-Circumvention

Contractor is registered with phone carriers as the designated sender for the purpose of messaging Members for the duration of the Master Services Agreement.  And as such, Contractor is obligated to comply with industry rules and regulations. For compliance and legal protection, Contractor is required to maintain accurate records of consent, opt-in, opt-outs, and the content of every message sent to every Member. For this reason, all SMS messages must flow through Contractor platform.

Customer (and all Franchisees) agree to not send, or cause to be sent, any SMS messages to Members, by any means other than using Contractor’s tools or platform. Sending via any third party tools or services would prevent Contractor from maintaining accurate records and risk becoming non-compliant.  The impact for non-compliance is high: in some cases, carriers can require the entire database of Members be deleted.  As such, Customer agrees to pay a non-circumvention fee of $4.50 per number, per message sent or causing to be sent, via any messaging service or provider other than Contractor for the duration of the MSA. Parties agree this fee is reasonable in light of the risk and financial harm caused by Customer’s circumvention.

7. Data Custody

Possession of Personally Identifiable Information (PII) requires compliance with a complex framework of federal and state laws, as well as sector-specific regulations, including Federal laws inc Privacy Act of 1974, FTC Act, Children’s Online Privacy Protection Act (COPPA), Electronic Communications Privacy Act (ECPA) and Computer Fraud and Abuse Act (CFAA), California Consumer Privacy Act (CCPA) / California Privacy Rights Act (CPRA), Texas Data Privacy and Security Act (TDPSA) , and many more.  As of this writing, more than 20 states have or are enacting comprehensive data privacy laws. For more information see: https://pro.bloomberglaw.com/insights/privacy/state-privacy-legislation-tracker/#states-with-comprehensive-data-privacy-laws

To ensure compliance and avoid data breaches and accidental leaks of any kind, Contractor retains the Member phone numbers and other PII in secure custody for the duration of the MSA.  Additionally, Contractor’s system and data warehouse primarily use anonymous IDs rather than phone numbers for protection of Buyer and Member PII.

At the expiration of the MSA Customer receives Buyer and Member PII in a secure format.

However, if Customer requires physical possession of Member PII data including phone numbers, prior to expiration of MSA, Contractor will provide Member PII data after Customer signs an additional Data Protection and Liability agreement.

Contractor is willing to act as a broker for any Data Enrichment (see below) on behalf of Customer to minimize Customer risk of liability for breach or accidental loss of PII data.

8. Data Enrichment

There are many Data Enrichment Firms (“DEF”) that will rent (monthly or annual terms) or sell (one-time fee) enrichment data about Members.  Basic enrichment data may include demographic information  such as income, age, number of children in the home and ages, home ownership, political party, etc.  

Customer is aware that many so-called “data” companies actually seek to resell Member list, or tag Member with “Brand X member” and resell that attribute to Brand competitors. To avoid this, and protect the brand identity from the member data, Customer agrees to notify and to work directly Contractor for any engagment with Data Enrichment Firms or any firms requesting PII data.   

Further, Customer agrees to two pre-conditions to engage with Data Enrichment:

8.1 No Member purchase history. Customer agrees to NOT supply any Member purchase history data to any third party.  This includes per-Member purchase summary, amounts, items names, etc. Note that no DEF needs purchase history for matching, or to do any enrichment for Customer.  

8.2 Deletion policy. Customer agrees that any agreement Data Enrichment Firm (DEF), will specify that DEF will not merge Customer- supplied data with DEF’s existing data, and that DEF agrees to delete all copies of Customer data upon request or end of agreement. To protect against accidental PII leakage, it is preferred that Contractor act as a trusted broker and main the brand anonymity for the customer.

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9. Member Support

Customer agrees to provide support to end users (“Buyers”) and ("Members") for all usability and customer account issues.  Contractor agrees to provide technical support to Customer for technical issues and general support via the SAAS manager.

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