Canadians have a simple message for the U.S. credit card industry: Don't fiddle with our rewards programs.

Alliance Data Systems Corp., a Plano, Texas-based card company, finds itself in a jam north of the border after making some widely panned changes to its popular Air Miles program.

Back in 2011, the firm added a five-year expiration date to Air Miles, which allows consumers to accumulate points at large retailers like Shell, Staples and Lowe's, and to redeem them for cash or travel. Previously, the rewards did not expire.

The policy change drew little attention at the time. But more recently, with expirations scheduled to start at the end of the year, the company has been facing a popular backlash.

Canadians redeemed 1.8 billion Air Miles points during the third quarter — up 74% from the same period a year earlier — as they rushed to beat the deadline.

During Alliance Data's most recent earnings call, CEO Ed Heffernan said: "We want to make sure that the consumer is having a good experience, and it has been challenging. We are putting, therefore, many millions of dollars into customer care. We have hired a ton of folks to work the phones on the redemption side up in Canada."

In October, legislation was introduced in the province of Ontario to ban the expiration of reward points based solely on the passage of time. That legislation is widely expected to be approved, and other Canadian provinces may follow Ontario's lead.

So last week, Alliance Data reversed course. The company, which operates Air Miles through its LoyaltyOne subsidiary, said in a securities filing Thursday that it is canceling the five-year expiration policy. The firm also plans to take a one-time charge that is expected to be between $180 million and $250 million.

Problem solved? It may be, or it may not.

Some Air Miles customers who rushed to redeem their points before the looming deadline complained in the Canadian media last week about the company's last-minute change of course.

Alliance Data also announced Thursday that it will adjust the value proposition for Canadian consumers in order to maintain the program's economics. In other words, Air Miles points will be worth less than they used to be — a change that could lead to more grumbling among customers.

Canadian retailers that participate in Air Miles are watching the situation closely and could decide to end their involvement, said William Ryan, an analyst at Compass Point Research & Trading. "It could be a big mistake," he said, referring to Alliance Data's decision to lessen the value of rewards points.

Other analysts were more upbeat about the future of Air Miles.

"The program continues to be very popular," said Larry Berlin, an analyst at First Analysis.

He noted that Alliance Data needs to pay attention to public relations in Canada, but added: "They haven't done anything yet to create any negative feeling."

Air Miles works a bit differently than many rewards programs in the U.S. — the Canadian program does not require consumers to pay with a specific credit card. But the issue of how easy it ought to be for customers to redeem their points is the same in both countries.

Large U.S. card issuers have generally been taking steps to make it easier for customers to redeem their points. For example, Discover Financial Services allows its customers to redeem cash-back rewards in any amount, and also to redeem even after the credit card account has been closed.

The perils of the opposite approach are now on display in Canada. When companies make it harder to redeem rewards, customers may revolt.

"It leaves a longtime set of bad feelings with consumers," said Brian Riley, an analyst at Mercator Advisory Group, "because they feel they've earned them."

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