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The purpose of this paper is to explore the various characteristics of frequent-flier programs and the threats they pose to the Australian anti-money laundering regime.

A thorough literature review was conducted on frequent-flier programs and the associated money-laundering threats. Money laundering (ML) risks were identified in relation to the three stages of ML and effective law enforcement.

The findings indicate that as ML continues to gravitate towards the weaknesses in the financial system, frequent-flier programs provide yet another avenue for criminals to exploit. The risk factors associated with frequent-flier programs – specifically, anonymity, elusiveness, the rapidity of transactions occurring in a digital environment, ambiguity regarding responsibility for compliance, the global network of participants and members, difficulty in accessing records and an overall lack of oversight – were all integral considerations in establishing the ML risks of such programs.

The global environment in which individuals conduct financial transactions continues to evolve rapidly, exacerbating ML risks for regulators and governments alike. Unless there are globally unified efforts to heighten awareness, the threats posed by virtual currency will increase at a rapid rate. With this in mind, the starting point of this paper is an attempt to analyse the ML risks pursuant to frequent-flier programs in Australia.

The findings from this study can be used to gain greater insights into frequent-flier programs and can have broader application for evaluating other similarly structured loyalty programs, both in Australia and globally. Additionally, the findings from the study can enhance overall awareness of the ever-increasing threat to global financial integrity through the expansion of virtual currency.

Discusses frequent flyer programs, promotional programs aimed at increasing brand loyalty among the important business travel market segment. Shows how what seemed like a good marketing strategy has turned into a nightmare for nearly all parties concerned; airlines have found that the programs cost more than they are worth. Draws lessons from the airline frequent flyer programs that might be of interest to any marketing manager who is interested in using promotional programs to create competitive advantage.

The purpose of this paper is to analyse money laundering and financing terrorism risks of present customer loyalty programs. We try to identify the current state of money laundering and financing of terrorism (ML/FT) risks and detect the vulnerabilities that may be present in loyalty schemes that tend to obtain wider payment functionality.

The paper draws upon the risk matrix developed by the Financial Action Task Force experts for the new payment methods. Each risk factor is analysed against the features of the customer loyalty programs, and the aggregated risks are also reviewed within three stages of money laundering.

The analysis shows that despite the obvious evolution of payment functionality of the customer loyalty awards, businesses have already put in place relevant risk-mitigation measures that support the hypothesis that business practices can effectively mitigate ML/FT risks even without precise regulation. Yet, the paper shows some potential vulnerabilities that are to be monitored in order to prevent the system from abuse by the criminals.

The paper shows that loyalty awards share certain characteristics of the centralized private currencies. Hence, researchers are encouraged to look more closely into the potential ML/FT risks posed by the private currencies as well.

The paper provides an insight into money laundering and terrorist financing risks that can be relevant for the non-financial products which demonstrate some payment functionality.

The paper is one of the first research of the loyalty awards as a quasi-payment tool in the context of the anti-money laundering and combating financing of terrorism (AML/CFT) regime.

Customer loyalty schemes have blossomed in the era of customer retention, and have been willingly embraced by both retailers and consumers alike. Today’s loyalty schemes are modelled on the AAdvantage Programme; a frequent flier programme initiated by American Airlines in 1981, and lessons from the air‐line industry are briefly introduced. The primary purpose of this paper is to evaluate the extent to which loyalty schemes really can build loyalty. In order to do this, four categories of loyalty as identified in the literature are considered. Given existing criticisms of loyalty schemes it is concluded that such schemes have an important role to play in situations where no loyalty or spurious loyalty is evident. However, where sustainable loyalty is the ultimate goal, customer loyalty schemes are of importance only as part of a coherent value proposition.

The purpose of this paper is to examine the methods used by marketers over the past years to develop loyalty among customers. Furthermore, the paper considers the shortcomings of these methods and certain societal and technological changes that have further impacted on the potential effectiveness of these methods in the future.

The author uses his experience working with hundreds of marketers around the world developing, managing, analyzing, measuring and improving customer loyalty strategies and tactics. The author combines these experiences with analysis of certain dynamics in the marketplace that have changed the way marketers must interact with customers. Finally, the author has combined this experience and analysis to formulate a point of view about the impact on marketing strategies in the future.

Many of the past efforts used by marketers to develop customer loyalty have been ineffective because they have been based on tactics used in the airline industry. These shortcomings will become greater in the future unless marketers change their ways. Corporate scandals have eroded the trust that customers have in marketers and, therefore, marketing efforts must be more genuine and easily understood or customers will react skeptically. Concerns about privacy and identity theft have heightened concerns among customers and made them more wary and, therefore, less willing to openly share information and engage in a relationship with a brand unless there appear to be genuine value and behavior by the company that engender trust and faith.

Marketers must step back and make absolutely certain that their efforts are based on customer needs and desires and do more to enhance customer trust than to erode it. Marketing strategies and programs must be believable. One of the most important components of customer relationships moving forward will be the development of trust that further enhances the customers' willingness to interact with certain brands and companies.

There is a great deal of talk in the marketplace about customer relationships. This paper seeks to bring the dialogue down to earth and incorporate the customer's point of view rather than just the theoretical marketing point of view. This paper suggests that marketers should work harder and work smarter to be sure that their programs are worthwhile to customers.

The purpose of this paper is to help airlines gain a better understanding of passengers’ service concerns, identify opportunities for continuous service improvement, and then develop service benchmarking standards that can be a yardstick for the airline’s competitiveness.

This paper develops a set of target performance standards that helps airlines monitor their service delivery process, identify relative weaknesses, and take corrective actions for continuous service improvements using exploratory data analysis and competitive gap analysis.

This study reveals that a service attribute considered most important to the airline customers’ impressions of service quality are air safety. This result reflects a growing concern over potential terrorism against airlines in the wake of the September 11 incident. The authors also found that proper baggage handling, competitive airfare, and on-time arrival/departure were next most important service attributes, whereas frequent flier and code-sharing programs were least important. Furthermore, the authors discovered that airline passengers’ perceived service quality influenced their choice of airlines. That is to say, airline service quality can be an important gauge of airline market share and revenue.

The current study is limited to the evaluation of comparative service quality of airlines in the USA. Thus, this study cannot be generalized to the airline passengers’ perceived service quality in other countries or different cultural settings. Also, this paper focuses on the performance aspect of benchmarking rather than the strategic aspect of benchmarking.

With rising costs of fuel, labor, maintenance, and security, many airlines are at a crossroads where they have to decide between succumbing to restructuring pressures in a form of mergers/acquisitions and reinventing their service offerings. One viable means of reinventing airline service offerings is to learn more about what airline passengers truly value and appreciate in terms of service offerings and then figure out what it takes to win the hearts of customers and then how the airline can differentiate its service offering from those of its competitors. With this in mind, this paper develops viable service improvement strategies for the airline that can enhance its competitiveness in the struggling airline industry.

This paper is one of a few attempts to identify a list of service attributes most important to airline service quality based on the actual survey of airline passengers, and then develop a benchmark standard of airlines in the USA from a customer (passenger) perspective.

Methodological pluralism in consumer research is usually confined to post‐positivist interpretive approaches. Argues, however, that a positivistic stance, radical behaviourism, can enrich epistemological debate among researchers with the recognition of radical behaviourism′s ultimate reliance on interpretation as well as science. Although radical behaviourist explanation was initially founded on Machian positivism, its account of complex social behaviours such as purchase and consumption is necessarily interpretive, inviting comparison with the hermeneutical approaches currently emerging in consumer research. Radical behaviourist interpretation attributes meaning to behaviour by identifying its environmental determinants, especially the learning history of the individual in relation to the consequences similar prior behaviour has effected. The nature of such interpretation is demonstrated for purchase and consumption responses by means of a critique of radical behaviourism as applied to complex human activity. In the process, develops and applies a framework for radical behaviourist interpretation of purchase and consumption to four operant equifinality classes of consumer behaviour: accomplishment, pleasure, accumulation and maintenance. Some epistemological implications of this framework, the behavioural perspective model (BPM) of purchase and consumption, are discussed in the context of the relativity and incommensurability of research paradigms. Finally, evaluates the interpretive approach, particularly in terms of its relevance to the nature and understanding of managerial marketing.

The purpose of this study is to evaluate the impact of reward structure on the customer's value perception of the program, loyalty to the program and loyalty to the firm.

A 2 (type of reward) x 2 (timing of redemption) between subjects experimental design was conducted. In addition, the indirect effect of the customer's value perception of the program on loyalty to the firm via loyalty to the program is tested with Hayes and Preacher's mediation procedure.

Study results indicated that type of reward has a positive impact on the perceived value of a loyalty program. Program loyalty mediates the relationship between the perceived value of the loyalty program and customer loyalty, as well as the relationship between type of reward and customer loyalty.

The findings of this study demonstrate the importance of the type and timing of loyalty program rewards on customer perceptions of the value of the loyalty program. In addition, this study is a step forward in providing a deep understanding of the impact of such perceptions on loyalty. These findings fill a number of research gaps and provide tangible guidance for practitioners.

This article aims to examine the negative effects of loyalty programs from the perspective of frustration theory. It seeks to develop a model of customer frustration on the basis of frustration theory and an exploratory qualitative study.

First, frustration is defined as a special form of dissatisfaction and a general model of frustration in business relationships is developed by evaluating the literature on frustration theory. Second, an explorative and qualitative focus group study among participants of a loyalty program for frequent travelers is conducted. A multi‐level iterative content analysis of the participants' statements reveals the existence of different categories of frustration incidents. Third, the findings of the study are used to develop a system of propositions that generate a specific model of customer frustration in loyalty programs.

Seven categories of frustration incidents that were triggered by the loyalty program and lead to frustration sensation and subsequent frustration behavior, like protest or avoidance, could be identified. With four categories of incidents – inaccessibility, worthlessness, qualification barrier and redemption costs – customers' frustration sensation and behavior are directed on the program itself (program‐related frustration incidents). For the other three – discrimination, economization and defocusing – frustration sensation and behavior also affect the perception of the relationship with the firm (relationship‐related incidents).

The exact differentiation of frustration from related constructs should be the topic of further research. The findings of the empirical study are of limited generalizability because the object of investigation was a single company's loyalty program in a special industry sector. Hence, the introduced propositions should be further specified and tested in a large‐scale quantitative study in different sectors and with a number of companies and programs. Further work is necessary to allow deeper insights into the relationships between the elements in the customer frustration model.

Several implications for planning and implication arise from the results of the study. Management has to make sure that program‐related and relationship‐related negative effects are avoided. That calls for offering only those benefits that represent genuine additional value to customers and for ensuring that the benefits can be claimed at any time and without any additional effort by the customer. Furthermore, the perceived quality of the program should be monitored to obtain prompt information about possible customer frustration and indications of protest (i.e. customer complaints) should be viewed with particular attention.

This paper provides new insights into the so far highly neglected negative side effects of loyalty programs. Also, innovative is the first‐time application of the frustration construct to the analysis of customer behavior in the context of loyalty programs. The contribution is of high value for all who research in the field of customer relationship management and customer loyalty.

Direct marketing traditionally has been regarded as a powerful tool for attracting new customers. Today more and more companies are recognizing that it also can be extremely effective in retaining existing customers, winning their loyalty, and generating additional sales.