Discount department store, Zellers, is cancelling its kids' Generation Z loyalty scheme.

The store said that around 25 per cent of Canadian children and teenagers had signed up to the scheme.

Youngsters could redeem their points for items such as portable keyboards and mobile phones.

Instead, the retailer is launching new HBC loyalty cards but not for children.

It said Gen Z users with a significant balance of points will be able to convert them to their parents' HBC reward cards.

Zellers said the Gen Z scheme was launched in 1998 to engender loyalty and was always seen as a three-year test programme.