You've seen the ads. $400 credit for switching. Free months of energy. A gift card just for signing up. It works, because who doesn't want free money?
So who pays for all that free money? In most cases, you do. Not on the day the bonus lands in your account, but six or twelve months later, once your rates have quietly reset and you've stopped checking. A sign-up bonus is an advance, and the retailer fully intends to collect.
What loss leading actually means
Loss leading is a pricing tactic that's been around long before energy retailers picked it up. A business sells something below cost, or gives it away, to get a customer in the door. The loss on that first sale is deliberate. The business is betting it'll make the money back later, once the customer has settled in and is no longer watching their bill closely.
In energy retail, the loss leading game has been played for decades, but in 2026 battery owners are now a particularly attractive target. You represent years of higher-value business to a retailer, because your usage patterns and export behaviour are worth more to manage than a standard household. That makes the cost of winning you as a customer easier for a retailer to justify, and easier to claw back later.
A loyalty program in reverse
Think about how a loyalty program is supposed to work. Buy ten coffees, get one free. Energy retail runs the same idea backwards. Buy ten coffees, and your local cafe puts the price of your latte up from $4.50 to $6.00. The reward for sticking around is a worse deal.
The ACCC's December 2025 National Electricity Market report found households on a plan more than three years old were paying, on average, $221 more per year than customers on newer plans, reaching as much as $408 a year in South Australia.
Digging deeper, the ACCC found 73.7% of customers on those older plans were paying prices at or above the Default Market Offer, the safety-net ceiling, compared to just 20.4% of people on newer plans.
As ACCC Commissioner Anna Brakey noted on the findings:
"Loyalty penalties are alive and well in the retail electricity market, so the very best thing people can do to save money is to switch plans."
Loss leading and the loyalty tax are two sides of the same business model. The sign-up bonus is how a retailer spends money to bring you in. The loyalty tax is how it earns that money back once you've stopped watching.
How the clawback works
The sign-up credit or discount period has an end date, whether or not the retailer makes that obvious. Once it lapses, your rate will generally reset upward.
Energy Consumers Australia (ECA) captured this exact mechanic in their response to the AEMC energy pricing review:
"Just to keep their market share, retailers will offer unrealistic low prices - which they then need to hike up, often by 20% or more, within a year. What's worse, they fund these low prices by charging loyal customers more."
To make matters worse, retailers often mask this transition using what regulators call "same-name" plan confusion - keeping the exact name of your plan intact while quietly altering the underlying rates, making it incredibly difficult to notice the shift.
The part that makes this hard to catch is what regulators call "same-name" plan confusion. Your plan keeps its name while the rates underneath it change. So even if you do the sensible thing and check your plan with your retailer, you'll see the familiar name, probably alongside the great advertised rates, and reasonably assume that's what you're paying. Those advertised rates now apply to new customers only. Not to nice loyal people like you.
From that point, you've joined the unfortunate pool of customers whose rates are paying for the next batch of sign-ups arriving on discounts.
Why battery owners should care
If you own a battery, your business is worth a lot to a retailer, and in 2026 battery owners have become a particularly attractive target for sign-up bonuses.
The reason is your exports. When wholesale prices spike, your retailer gets paid the wholesale rate for the energy your battery sends to the grid, while often passing on to you a fixed feed-in rate of just a few cents. The gap between those two numbers belongs to the retailer, and it's a big enough slice of the pie to make a generous sign-up bonus easy to justify. The cost of winning you is recovered quickly from the value your battery creates.
Why Amber doesn't play this game
Amber's only margin is a flat monthly subscription. We pass through the wholesale price of energy with no markup, whether you signed up last week or three years ago. Because there's no gap between what we pay for energy and what we charge you, there's no pool of retail margin sitting around to fund mass-marketed sign-up bonuses.
A fair question comes up here: doesn't Amber give out credits when you join through a friend?
Yes, we do. But a referral credit follows a genuine recommendation from a real person who understands how the wholesale model works and took the time to pass that on. It isn't a flashy bonus broadcast to strangers to get them through the door before they've read the fine print.
More importantly, it doesn't change the economics of your plan. Once your welcome credit is used up, your subscription and pricing work exactly as they did on day one. There's no clawback built into how we make money, so there's nothing to claw back. If Amber wanted to run the loss-leading playbook, we'd need a bigger margin on our existing customers to pay for it, and we don't have one.
The same logic applies to your battery. With Amber, you're paid the wholesale price for what you export and you keep 100% of those earnings, with SmartShift handling the timing. The value your battery creates during a price spike goes to you rather than into a retailer's margin.
We're incentivised to keep you for a different reason entirely: the deal itself holds up. Stay with Amber for a few months and you can see it directly, in your subscription, your wholesale rates and what your battery is earning through SmartShift. There's no honeymoon period to fall out of, because there was never a honeymoon rate to begin with. Whether you joined last week or three years ago, everyone on your plan pays the same flat subscription.
Ready to escape the loyalty tax?
If you’re tired of the endless cycle of signing up, getting stung, and having to switch again, it’s time to move to an energy model that treats you the same on day 1,000 as it did on day one. No hidden clawbacks, no honeymoon rates - just real wholesale energy and complete transparency.
- Own a solar or battery setup? Find out how much more your system could make you by checking our solar and battery calculator.
- Want to see how the numbers stack up? Grab a recent bill and get a quick quote to see what wholesale pricing looks like for your household.
