We've been talking a lot lately about the loyalty tax. It's the pattern where a big energy retailer reels you in with a low intro rate or a discount, then slowly pushes your prices up once you've settled in and stopped paying attention. The longer you stay, the more you tend to pay.
A fair question has come up in response - including from some of our own community. Amber gives out referral credits when you join through a friend. Isn't that just a new customer discount wearing a nicer outfit? Aren't we doing the exact thing we criticise?
It's a reasonable question. So let's go through what the loyalty tax actually is, how our referral credits work, and why the two aren't the same.
What the loyalty tax actually is
The loyalty tax isn't about the discount you get at the start. It's about what happens to your rate afterwards, and how little you're told about it.
A traditional retailer offers a discount or a low rate to get you through the door. Over the following months, that rate tends to creep up. The reference price shifts. The conditions change. Because switching energy providers is a chore most people only do once every few years (if at all), the increase often goes unnoticed. You keep paying, the price keeps rising, and meanwhile a brand new customer signs up for the same attractive intro deal you started on.
The ACCC's December 2025 National Electricity Market report found that households on a plan more than three years old were paying, on average, $221 more per year than customers on newer plans. The penalty varies by state, reaching as much as $408 a year in South Australia and $303 in New South Wales. As ACCC commissioner Anna Brakey put it, loyalty penalties are alive and well in the retail electricity market, and the best thing people can do to save money is to switch plans, whether that means moving to a cheaper plan with their existing retailer or changing retailers altogether. Switching is a chore, so once people have done it they tend to stay put, and retailers rely on that. They offer something attractive at the start and increase prices later, counting on you not to look closely.
The mechanism that makes the loyalty tax possible is confusion. You don't know where your rate is supposed to land once the intro period ends, so you can't easily tell when you're being charged more simply for staying.
How our referral credits work
When a friend refers you to Amber, you both receive a credit. It exists because someone you trust took the time to tell you about Amber and help you understand how the model works.
A referral credit only happens when an existing customer who understands the model passes that understanding on to you. It isn't a lure broadcast to strangers through a TV advert promising bill credits to anyone who signs up before they've read the details. The credit follows a genuine recommendation from a real person, not an attempt to get you in the door before you understand what you're agreeing to.
Why the credit doesn't become a loyalty tax
At Amber, once your welcome credit is used up, your subscription works exactly as it did before. We pass through wholesale energy prices with no markup, the same way we did on the day you joined, and the only thing you pay Amber is a flat monthly subscription.
That subscription is the same published price for everyone on your plan, whether you joined last week or three years ago. A loyalty tax works by charging long-standing customers more than new ones for the same thing, while keeping you from noticing. Amber doesn't have a separate, higher price for customers who've stopped paying attention. The credit was a one-off bonus when you joined, not bait to disguise a worse rate waiting for you later.
What makes Amber different
The loyalty tax works by keeping you in the dark. Retailers don't make it clear what your normal price is, so you can't tell when you're paying more for the simple act of staying with them. They're relying on you not noticing.
With Amber, the numbers are all in view. Your credits appear clearly on your bill. Your subscription is a known, fixed amount. Wholesale prices are wholesale prices, passed straight through with nothing added. You can see each part of what you pay and what you earn.
A referral credit is a thank-you paid on top of a deal that doesn't change. A loyalty tax is a discount designed to keep you from noticing a deal that quietly gets worse.
Why we keep talking about the loyalty tax
We talk about the loyalty tax because it costs Australian households real money, and most people don't realise it's happening to them. Naming it is a way of pointing out something traditional energy retailers would rather keep quiet.
Some people argue the responsibility should sit with the customer to keep shopping around. We disagree on this point push back on that. The confusion is created by the retailer, not the customer, and it's reasonable to expect a clear, stable deal rather than one that depends on you constantly checking whether you're still getting a fair rate. Putting the burden back on the household for a problem the retailer designed doesn't sit right with us.
Amber's entire model is built the other way around. We pass through wholesale energy prices at cost, with no markup, so unlike a traditional retailer we don't earn more when your usage or your energy costs go up. What you pay Amber is a flat subscription, shown plainly and charged at the same rate for everyone on your plan.
If you'd like to understand how the referral credits, our subscription and wholesale pricing all fit together, you'll find the detail in various FAQ pages here: help.amber.com.au.
